Archive

Archive for the ‘Current Events’ Category

IP Means you MUST Buy that iPhone

May 1st, 2010 Jericho No comments

From The Mises Institute

The recent case of the lost next-generation iPhone prototype can help illustrate the absurdity of intellectual property rights. The basic idea of IP is that information can be owned–patterns, recipes, methods, designs, and so on. Even Rothbard, in The Ethics of Liberty, makes this assumption in arguing for a type of contractual copyright:

A common objection runs as follows: all right, it would be criminal for Green to produce and sell the Brown mousetrap; but suppose that someone else, Black, who had not made a contract with Brown, happens to see Green’s mousetrap and then goes ahead and produces and sells the replica? Why should he be prosecuted? The answer is that, as in the case of our critique of negotiable instruments, no one can acquire a greater property title in something than has already been given away or sold. Green did not own the total property right in his mousetrap, in accordance with his contract with Brown—but only all rights except to sell it or a replica. But, therefore Black’s title in the mousetrap, the ownership of the ideas in Black’s head, can be no greater than Green’s, and therefore he too would be a violator of Brown’s property even though he himself had not made the actual contract.

Note how Rothbard, in order to defend a type of copyright that “contractually” ensnares third parties (which is essential if there is to be anything like IP), has to assume that ideas are separable from things they are embodied in and somehow separately ownable. I discuss this interesting and uncharastic mistake of Rothbard’s at pp. 47- of Against Intellectual Property. The “Farmer Jed” example on pp. 54- provides an illustration of the obvious absurdity of ownership of knowledge:

Farmer Jed discovers oil under his land. No one for miles around knows about the black gold. Jed plans to buy his neighbors’ property for a song; they’ll sell it cheap, too, since they don’t know about the oil. In the middle of the night, his nosy neighbor Cooter, suspicious over Jed’s recent good spirits, sneaks onto Jed’s land and discovers the truth. The next morning, at Floyd’s barbershop, Cooter spills his guts to Clem and the boys. One of them promptly runs to a pay phone and gives a tip to a reporter at the Wall Street Journal (who happens to be his nephew). Soon, it is common knowledge that there is oil in the vicinity. The neighbors now demand exorbitant prices for their land, thus spoiling Jed’s plans.

Let us grant that Cooter can be prosecuted for trespass and harms flowing therefrom. The question is, can Jed’s neighbors be prevented from acting on their knowledge? That is, may they be forced to somehow pretend that they do not know about the oil, and sell their land to Jed for what they “would have” sold it when in ignorance? Of course they may not be so forced. They own their land, and are entitled to use it as they see fit. Unlike tangible property, information is not ownable; it is not property. The possessor of a stolen watch may have to return it, but so long as the acquirer of knowledge does not obtain that knowledge illicitly or in violation of a contract, he is free to act upon it.

Note, however, that according to the reservation-of-rights view, the neighbors would not be permitted to act upon their knowledge because they obtained it ultimately from Cooter, a trespasser who had no “title” to that knowledge. Thus, they could not have obtained “greater title” to it than Cooter himself had. Note also that others, such as geological surveyors mapping oil deposits, cannot include this information in their maps. They must feign ignorance until given permission by Jed. This imposed ignorance correlates with the unnatural scarcity imposed by IP. There is clearly no warrant for the view that reserved rights can somehow prohibit third parties from using knowledge they acquire.

I was reminded of this by the recent lost iPhone story. Surely there are first-gen iPhone and iPhone 3G owners who have been planning to buy the iPhone 3GS, the current top of the line iPhone model. And surely there are some people out there who were planning to buy their first iPhone in the next few weeks or month. There can be no doubt that a number of these people will hold off on that purchase, now that they know a new iPhone model is going to come out probably in the upcoming months. They’ll wait for the new iPhone instead. This means Apple will lose sales, or at the very least that sales will be delayed.

According to IP advocates, Apple owned the lost iPhone and also its IP–the designs, the trade secrets, the very information that a new iPhone was coming out. If you take IP seriously, then the Gizmodo employees had no right to the “knowledge” they gleaned from the iPhone prototype (we can safely assume here that they were aware it was Apple’s property and that they were dissecting and using this device without Apple’s consent–a form of trespass). Gizmodo had no “title” to these ideas. And, as Rothbard argues in the case of the mousetrap, we masses who have heard about this incident have no title to these ideas either–after all, we got the ideas from Gizmodo, but it’s a well known legal maxim, as Rothbard relies on, that you cannot receive greater title than the person you receive the thing from. Thus we have no title to these ideas either. That means we have no right to use this information. If I was going to buy an iPhone 3GS next week, I must still go through with it. If I don’t, I am committing trespass against Apple by using their property (the information about the existence of the new iPhone prototype) without Apple’s consent. No, Apple is entitled to that sale. As Jeff Tucker remarked to me, in discussing this, I’d be committing “insider refraining from buying” if I acted on information I don’t own. (Note that the idea of being entitled to a sale underlies the notion of defamation law and also trademark law. If Big Burger spreads lies about Giant Burger then Giant Burger sues because it “lost business”–business it was presumably entitled to. Same thing if Big Burger uses a mark too similar to Giant Burger’s trademark.)

But no worries that I’ll buy the new iPhone and feel bad about my purchase–even doing this would be using the information, and I have no right to do this. So I must be glad about my new purchase. To fail to do so violates Apple’s proprietary rights in patterns and information.

This is all nonsense, of course. But it’s one of the many absurd results you get if you treat information as ownable. As I discuss in Intellectual Property and the Structure of Human Action, human action employs means to achieve ends. Action is guided by knowledge and information–your knowledge about what means are suitable to achieve your ends, say. To take a simple example, suppose you and I each want to bake a cake. We can both make a cake at the same time using the same recipe (ideas), but not using the same eggs (scarce means). That’s precisely why there are property rights in scarce resources and only in scarce resources. Where there is scarcity, the things have to be rationed and assigned to particular owners so that these things can be successfully employed as means in action. If eggs were in infinite abundance at the snap of a finger no one would need to take anyone else’s eggs, and if they did, it would not matter. You could conjure up eggs and make your cake, or if you take my eggs I can just conjure up more and make my cake. There’s no scarcity problem to solve. When there is scarcity, we assign property rights so that there can be peaceful and prosperous use of these things in action. But for things that are not scarce, such as information, the question of property rights does not arise, and makes no sense.

In other words, for scarce things, property rights are assigned so that these scarce things can be used. Property rights help address a limitation of things in the real world. For ideas, IP assigns property rights in something that is infinitely abundant, in a bizarre attempt to make these things scarce, or less abundant. In the case of scarce things, property rights are a response to the problem of scarcity. In IP, property rights are assigned to create a problem of scarcity that did not exist before. The goal should not be to make abundant things limited and scarce; but, if anything, to make valuable scarce things as abundant as possible.

  • Share/Bookmark

Fed Shouldn’t Reveal Crisis Loans, Banks Vow to Tell High Court

April 14th, 2010 Jericho No comments

From Bloomberg

(Bloomberg) — The biggest U.S. commercial banks will take their fight against disclosure of Federal Reserve lending in 2008 to the Supreme Court if necessary, the top lawyer for an industry-owned group said.

Continued legal appeals will delay or block the first public look at details of the central bank’s $2 trillion in emergency lending during the 2008 financial crisis. The Clearing House Association LLC, a group that includes Bank of America Corp. and JPMorgan Chase & Co., joined the Fed in defense of a lawsuit brought by Bloomberg LP, the parent company of Bloomberg News, seeking release of records related to four Fed lending programs.

The U.S. Court of Appeals in Manhattan ruled March 19 that the central bank must release the documents. A three-judge panel of the appellate court rejected the Fed’s argument that disclosure would stigmatize borrowers and discourage banks from seeking emergency help.

“Our member banks are very concerned about real-time disclosure of information that could cause a run on the banks,” said Paul Saltzman, the group’s general counsel, in an interview yesterday. “We’re not going to let the Second Circuit opinion stand without seeking a review.”

Regardless of whether the Fed appeals, the Clearing House will take the next legal step by asking for a review by the full appellate court, Saltzman, 49, said at his office in New York. If the ruling is unfavorable, the bank group will petition the Supreme Court, he said.

Joined Lawsuit

The 157-year-old, New York-based Clearing House Payments Co., which processes transactions among banks, is owned by its 20 members. They include Citigroup Inc., Bank of New York Mellon Corp., Deutsche Bank AG, HSBC Holdings Plc, PNC Financial Services Group Inc., UBS AG, U.S. Bancorp and Wells Fargo & Co.

The Clearing House Association, a lobbying group with the same members, joined the lawsuit in September 2009, after an initial ruling against the central bank in federal court in Manhattan.

The Fed is “reviewing the decision and considering our options,” said Fed spokesman David Skidmore in Washington. He had no comment on Saltzman’s plans.

Attorneys face a May 3 deadline to file their appeals.

“We’ll wait to see the motion papers,” said Thomas Golden, attorney for Bloomberg who is a partner at New York- based Willkie Farr & Gallagher LLP. “The judges’ decision was well-reasoned, and we doubt further appeals will yield a different result.”

Bloomberg sued in November 2008 under the U.S. Freedom of Information Act, after the Fed denied access to records of four Fed lending programs and a loan the central bank made in connection with New York-based JPMorgan Chase’s acquisition of Bear Stearns Cos. in March 2008.

231 Pages

The central bank contends that 231 pages of daily reports summarizing lending activity, which were prepared by the Federal Reserve Bank of New York for the Fed Board of Governors in Washington, aren’t covered by the FOIA. The statute obliges federal agencies to make government documents available to the press and the public. The suit doesn’t seek money damages.

The Fed released lists on March 31 of assets it acquired in the 2008 bailout of Bear Stearns.

The New York Times Co., the Associated Press and Dow Jones & Co., publisher of the Wall Street Journal, are among media companies that have signed up as friends of the court in support of Bloomberg.

The Fed Board of Governors’ “refusal to disclose the names of borrowers renders public oversight of its actions impossible — it prevents any assessment of the effectiveness of the Board’s actions and conceals any collusion, corruption, fraud or abuse that might have occurred,” the news organizations said in a letter to the appeals panel.

  • Share/Bookmark

Obama Will Now Have His Private Army

April 11th, 2010 Jericho No comments

From Canada Free Press

Of course,  SEC. 430, Establishing a Ready Reserve Corps.  lists in detail the commissioned Regular Corps and Ready Reserve Corps that will be trained up,  fired up,  lined up and controlled by Obama himself.  Naturally the purpose for this army is to stand by in case they are needed at short notice for a national health emergency or emergency response missions.

The health bill talks specifically about their routine training,  appointment by the President with the advice and consent of the Senate, and other details of service.

The bottom line after reading the details of this section,  is that Obama now will have his private army he always wanted.  As Saul Alinsky or Hitler would teach,  hide behind an expected issue.  Shine a bright light over here so you can walk forward with your agenda over there.

It is about a Health emergency….isn’t that ok?

In the history of our country, have we ever had such a massive, national health emergency that we needed a militia/military reserve ready to pepper the country and control things?  No!!!

Katrina…..there was the blue cross,  FEMA,  the National Guard,  local police,  charities,  congress and other leadership responding to this disaster.  Mayor Ray Nagin and FEMA got much criticism about their organization and response time, but that seems to be typical with any disaster,  be it tornado,  attack or hurricane.  Organization and pace can always improve.  New Orleans needed a ton of things,  not,  a military force trumping and smothering the naturally, already in force health and enforcement channels.

The last flu season……I followed the H1N1 Swine flu drama from beginning to end.  I was amazed as to how a normal flu season, even milder at times than most other flu seasons,  (according to CDCs own tracking data on their web site) was described as practically a nuclear bomb on America’s people and children.  There was ridiculous talk of forced inoculations,  yet real science pointing out (I talked with a few of the research scientists on my show) the danger and lack of real study with the vaccines.  Many later and serious health problems were linked to some of the dirty ingredients in the vaccine.  This was at the very least a horribly manipulated event.

With the messiah now with a ‘health’ militia, will the next flu season be an even larger crises causing FORCED vaccinations for the good of the community, family and country?  Wouldn’t it be special,  a Stepford wives,  ACORN type Obamaton showing up at your door with a forced injection or else.  What a wonderful opportunity to manipulate a flu season for a premiere, national emergency, thus declaring Martial law……oh yeah, being directed by Obama’s civilian militia.

The purpose in the Health care bill is listed as ‘routine public health and emergency response missions.’

As usual,  the description is vague and blurry enough that one wonders just what ‘routine public health’ issues are.  Remember Obama’s passion for abortion.  Some of his czars are abortion heroes.  John Holdren (Science Czar) even wrote about it being appropriate having ‘forced abortions’  and aborting a child up to age 2.  How do you do that since they have been alive for 2 years?  Do you push them in front of a train or mercifully inject them with poison?

Could this President some day declare a national population growth emergency and certain/controlled criteria for having children,  thus forcing abortions with some or worse?  He already has a sea of radical, abortion and control loving Stepford wives as his czars!  I pray and hope that something this absurd will never happen in America but with Obama’s actions and associations thus far…..watch very closely.

Another national emergency, needing Obama’s ‘health’ militia could be his troops coming to get our guns if we didn’t turn them in one day.  Of course, this again would be required of the people due to a contrived crises such as extreme growth of crime, terrorism, or hiding behind a treaty of ‘gun control’ with the UN, thus having to enforce it.

Some of you think I’m a loon and a tin helmet hussy…..but consider this;  Hitler did the very same thing.  First he got elected in through seduction, lies and false promises.  The Nazis had blown up the German Government headquarters already to blame the communists so they could have the desperate people give up their guns when they demanded them.

Hitler created a huge fan base and distracted public.  Once Hitler’s Enabling act was voted in,  he quickly got total control over health care and the records.  Mentally ill and physically challenged kids and adults disappeared to ‘job and skill training camps’  where they were murdered.  Hitler trashed and took out all religious symbols from the schools and work places,  instituting Hitler’s photos everywhere and a required national greeting ‘Heil Hitler’ (Hail my leader).  It was the instituted control of a nation and worship of Hitler.  Obama also wants our worship and now he has a civilian military………….for crises of course.

We must hold our Government accountable and not allow ourselves to be taken over.  We can’t support violence in anyway but we must not be seduced when dictator type behavior is everywhere.  Focus behind the conservative, freedom loving candidate in your city and state!  Do more than talk over coffee.  You need to organize,  call,  fax,  march if need be, and campaign.  We know that there will be voter fraud and manipulation like never before in November.  All conservatives and concerned citizens MUST vote this time.  Don’t fall into the self talk of ‘my vote won’t count anyway.’  If you don’t vote with your attitude and all,  the dead person and illegal alien down the street will.  Others will vote 20 times.  If we ALL vote we will win and correct this nightmare.

The way for us to secure our country is not to forget what has happened to the American people already with this unconstitutional Health care bill,  the destructive Cap and Trade bill being backed by fraudulent science, and the push for amnesty for illegal aliens and their coveted votes.  It is not imagined.  It is not extreme right wing talk.  It is real.  We have voted in a tyrannical socialist control freak who will continue to take control if we let him.

We must not play into Obama’s hands.  No violence…..obey the law and no threatening except to impeach,  repeal,  sue, march and vote him and this liberal congress out of office as soon as possible.  We then start the business of neutering, correcting and fixing our abused country, freedom and law!

  • Share/Bookmark

King World News Drops Another Bombshell In What Could Be the Largest Fraud In History

April 10th, 2010 Jericho No comments

From The Daily Paul

When will the MSM pick up on the story?

This time Eric King interviews Adrian Douglas, and Harvey & Lenny Organ. Harvey Organ testified at the CFTC Public hearings on Precious Metals on March 25 and was assisted by Adrian Douglas.

In this interview the first hand testimony of Harvey Organ and his son Lenny is presented of their experience in visiting the only bullion bank vault in Canada, the vault of ScotiaMocatta, and not only finding that their bullion was not there but that the vault was practically empty. His repeated complaints to the CFTC were responsible for him being invited to testify at the recent hearings. Following on the heels of the bombshell revelation that the LBMA sells 100 times the amount of bullion that it actually has, this latest revelation is equally disturbing for investors but indicates that the potential price appreciation of the REAL PHYSICAL precious metals is mind-bogglingly big when the defaults start to happen.

Listen to the interview at: KING WORLD NEWS

  • Share/Bookmark

Exposing the Government’s Lies

April 6th, 2010 Jericho No comments

From LewRockwell.com

“Everything the State says is a lie, and everything it has it has stolen.” ~ Friedrich Nietzsche, Thus Spake Zarathustra

Judge Andrew Napolitano opens his new book, Lies the Government Told You, with that quote, and that’s the book’s theme: the State is our enemy because it constantly lies, steals, and kills.

Radical Libertarianism

That’s a pretty radical idea, so this is a radical book.

This is not a book about “public policy,” about how we might limit the rate of government’s growth, or about how to “reform” this or that program. It’s not really even about “getting back to the Constitution.”

Instead, this book is about exposing the criminal acts of our rulers in Washington, and about abolishing and repealing powers and programs wholesale.

How principled is Napolitano here?

Take eminent domain. Even some libertarians decry “eminent-domain abuse” and complain about government taking property for purposes that aren’t a “public use” as the Constitution supposedly requires – as though taking people’s property by force for some purposes might be okay.

Judge Napolitano will have none of that. He writes that the concept of private property inherently entails “the right to exclude [others] . . . even the right to exclude the government.” So instead of wanting to curb the “abuses” or condoning eminent domain in some cases, Napolitano says abolish eminent domain.

Through such stances, Judge Napolitano, here as never before, shows himself to be solidly in the same uncompromising libertarian camp as his fellow LewRockwell.com columnists. Also, throughout the book, he cites names that will be familiar to LRC readers, such as Murray Rothbard, Lew Rockwell, Ron Paul (who wrote the foreword), Thomas DiLorenzo, and William Anderson. And the book takes the “libertarian populist” tone often found on LRC, including just the right balance of scholarly analysis, easy readability, and moral outrage. So if you like this website, you’ll almost certainly like this book.

It shows a lot of courage for Napolitano to take this approach, given that he works at Fox News Channel alongside some people who attack anyone who opposes the warfare and police state as not merely wrong but un-American and evil.

Big Lies

Each chapter in Judge Napolitano’s book attacks a different government lie. These are not the ordinary, petty lies the partisan hacks on cable news channels accuse politicians from the other party of telling. These are big, fundamental lies that underlie the State’s ostensible legitimacy, such as:

* “Congress Shall Make No Law . . . Abridging Freedom of Speech” (Lie #5)
* “The Constitution Applies in Good Times and In Bad Times,” (Lie #13)
* “Everyone Is Innocent Until Proven Guilty” (Lie #12)

You’ll notice that these are guarantees supposedly provided by the Constitution. But as Napolitano shows, the Constitution has failed to stop government from violating our rights.

For example, the First Amendment didn’t stop the government from violating free-speech rights during World War I, didn’t stop the government from imposing a “Fairness Doctrine” limiting speech over the airwaves, and doesn’t stop the government from routinely suppressing “commercial speech.”

The Constitution’s protections also conveniently disappear when the government considers an emergency important enough.

And the government will ignore the presumption of innocence if it wants to hold you without bail before a trial. It will even ignore evidence of your actual innocence if it has decided you should be executed, as Napolitano says “lawless, heartless future President” George W. Bush did when, as Texas governor, he insisted on executing Leones Torres Herrera despite another man’s confession to his alleged crime.

Other chapters show how various other government promises to respect rights (starting with the Declaration of Independence’s claim that “all men are created equal”) are mere lip service. Others respectively attack the lies of activist judges, gun controllers, nanny statists, drug warriors, and others who think they should run our lives for our own good. Others show how presidents, Republican and Democrat alike, lie when they say they don’t want to go to war and when they offer “facts” in making the case for war.

The “Free-Market” Lie

One of the most important chapters addresses this government lie: “America has a free market.” The State is inherently opposed to the market, of course, but U.S. politicians love to hail “free enterprise” and the “free market” for their own self-interested purposes. Doing so makes them sound decent and reasonable because even today many people have at least some vague sense that the market is the source of our prosperity. More importantly, politicians love to promote the idea that we have a free market because that means when things go wrong in the economy, they can blame the market, rather than accept blame themselves, and claim that they need more power to overcome the market’s alleged failures.

Napolitano refutes this lie by pointing out (citing George Reisman) that we have more than 73,000 pages of detailed economic regulations, which are hardly compatible with anything like a genuine free market. And he provides some reasons why government is the source of, not the solution to, our current economic problems. He devotes an additional chapter to attacking the dishonesty and destructiveness of the Federal Reserve and government-enabled fractional-reserve banking.

Something for Everyone

Lies the Government Told You is a great book to give to your friends who are sympathetic to some libertarian ideas – perhaps they are Tea Partiers, Glenn Beck listeners, or similar – but still have an excessive amount of faith (i.e., any faith) in the State and politicians to turn things around.

For that matter, it is also worth giving the book to your more sensible liberal friends who may still be under the delusion that the Obama Administration and other Democrats are somehow more honest and less bloodthirsty than their Republican counterparts.

And even if you’re already converted to Judge Napolitano’s libertarian view, the book still has much to offer because it’s loaded with interesting, useful information about both history and current events, at least some of which is sure to be new to you.

For example, he reveals ugly facts about the excessively revered Founding Fathers – like George Washington, who not only owned slaves, but also reportedly had their teeth pulled to make a set of dentures for himself. And he gives up-to-date details about how the government is using the Patriot Act and other totalitarian innovations to take away our privacy and freedom.

How to Fight Back?

The book’s conclusion (read it here) suggests three things that will be necessary to undo all the damage the government has done.

First, “we must acknowledge that through the actions of the government we have lost much of the freedom that we once thought was guaranteed by the Constitution, our laws, and our values.” Second, he writes, we must recognize that we do not have a two-party system in this country; we have one party, the Big Government Party.” Third, he suggests, the “millions of young people who reject both wretched visions of the Big Government Party . . . need either to form a Liberty Party or to build on the libertarian base of the Republican Party.”

Judge Napolitano’s book will surely help many people take the first two steps. That last item is a taller order. There are more libertarians today than ever before, but we’re still a small minority. We’ll need to do a lot more educational work before we can have much political success.

Still, Ron Paul has shown that a presidential campaign can be a great educational tool and bring many more people into the libertarian movement – so political activity may be worthwhile for that limited purpose. But it’s worth it only if we have a candidate who understands the importance of educating for liberty, can convey ideas exceptionally well, and can refuse to waver on principle even when under fire from vicious, lying opponents. I hope Ron Paul will do all those things again in 2012, as he did so well in 2008. But if he doesn’t want to, Lies the Government Told You suggests that there is at least one other man in America who would be up to the task.

  • Share/Bookmark

Video: Stupak Would Vote For Bill Even With Abortions (2009)

March 21st, 2010 Jericho No comments

It’s all a charade, people. Everything done in Washington is pre-determined and carefully calculated.

  • Share/Bookmark

Video: Stefan Molyneaux Interviews Michael Badnarik on Freedomain Radio

February 27th, 2010 Jericho No comments

  • Share/Bookmark

How the Greens Went Red

February 10th, 2010 Jericho No comments

From Liberty Unbound

As many supporters of the free market have observed, the mainstream environmental movement firmly supports big government. Yet this wasn’t always true, and it is conceivable that it won’t always be true in the future.

I worked as a free-market environmentalist within the environmental movement for many years, and I still have many friends within the movement who support free-market ideas. I’ve found that the environmental movement is really many different movements, although they mostly fall into two categories. My friend John Baden likes to call them “romance and sludge.” I worked mostly in the romance area — forests, parks, wilderness, and wildlife — and only peripherally in the sludge area — air and water pollution, solid waste, and toxic chemicals. So my view may be a bit skewed, but my experiences should still be useful to those who want to promote free-market solutions to environmental problems.

“In wildness is the preservation of the world,” wrote Henry David Thoreau in 1862. But he also wrote, “that government is best that governs not at all.” Unlike many environmentalists today, Thoreau did not view government as the best, or even an appropriate, way to preserve the wildness that he valued so highly.

Since Thoreau’s time, conservationists and environmentalists have had a love-hate relationship with government. Some have pursued preservation using entirely private means. Others have focused on government programs — but almost invariably have been disappointed with the results. Only in recent years have environmentalists tied themselves almost exclusively to big-government programs.

In 1890, less than 30 years after Thoreau’s death, conservationists in Massachusetts followed his teachings by forming the Trustees of Reservations, the world’s first private land trust. The group has since purchased 25,000 acres of land that it preserves as parks and wildlife refuges.

But the 1890s also saw the growth of big-government conservation. This resulted from several quirks in American history.

First, American common law, which normally was based on British common law, departed from the English precedent when it came to wildlife. In England, wildlife was owned by the owners of the land on which the wildlife resided. If a bird flew from my land to your land, the ownership transferred as soon as it crossed the property line. If I wanted to hunt birds or other wildlife, I had an incentive to manage my property in a way that would attract the wildlife.

Most land in 18th-century England was owned by comparatively few people, and much of the land in colonial America was also in a few hands. Early American courts decided that it was unfair that wildlife should be owned by a few private landowners; they therefore changed the common law so that wildlife would be owned by everyone. In many colonies (and this remains true in some states today) if I hunt on my own land, I cannot legally stop you from also hunting on my land. This removed the incentive to protect wildlife or wildlife habitat.

The ultimate result of these changes in the law was that, by the 1880s, populations of elk, bison, and birds such as the passenger pigeon were being hunted to extinction by people who sold the carcasses for meat. In 1887, future president Theodore Roosevelt founded the Boone & Crockett Club to lobby for regulation of hunting. Under state laws promoted by the club, people could hunt only for their own personal use, and not sell the meat to shops or restaurants; even personal hunting was severely restricted. Since state wildlife agencies charged fees to hunt, and got to keep those fees, the states effectively became owners of the wildlife and had an incentive to recover huntable species.

There remained little incentive to protect the habitat of wildlife that were not huntable, and this eventually led to passage of the federal Endangered Species Act. Yet if it had not been for American common law, private measures to protect wildlife and their habitat might have been sufficient to keep most species from going extinct.

A second quirk led to the creation of the world’s first national park. When early Californians recognized the scenic beauty in Yosemite Valley, which was mostly in federal ownership, they persuaded Congress to turn it into a park in 1864. But Congress simply handed the park over to the state of California to manage as a state park.

An 1870 expedition to the Yellowstone country led to a proposal that the geyser areas also be made into a park. But Wyoming would not become a state until 1890, so in 1872 Congress turned Yellowstone into the world’s first national park. Up to that point, Congress had a policy of disposing of all federal land as rapidly as possible. Yellowstone set a precedent that the federal government could and should retain land for conservation.

In 1890, John Muir successfully lobbied Congress to take Yosemite back from California and make it into a national park as well. In 1891, Congress passed a law allowing the president to reserve forest lands in federal ownership, thus preventing their transfer to settlers or timber companies. Soon, the federal government was managing more than 100 million acres of land for conservation purposes.

The third quirk was that concern about conservation grew at about the same time as the Progressive movement, America’s version of socialism. The two fed off each other. On one hand, Progressives cited conservation issues as examples of private failure and the need for government action. On the other hand, conservationists used the growing power of the Progressives to achieve their goals of land and wildlife conservation.

Most environmental histories of the era focus on the debate between preservationists such as Muir, who wanted to stop dams, timber cutting, and overgrazing on public lands, and conservationists such as Gifford Pinchot, who believed in using resources “wisely.” The two sides clashed in the famous debate about proposals to build a dam in Hetch Hetchy Valley in Yosemite National Park. Pinchot’s support of the dam (which was completed in 1923) had a hidden agenda: he wanted dams and power stations to be owned by the public, not by private electrical companies. Yet in their desire for public ownership, Pinchot and Muir were in agreement. Muir, in fact, disdainfully called Henry David Thoreau “that huckleberry picker” because he realized Thoreau would not have supported government conservation programs.

The preservation-conservation debate resumed in the 1960s. In the early 1900s, however, it was much less important than a debate over who should practice conservation: the federal government or states and private landowners. This debate is largely forgotten today.

Pinchot — the first chief of the Forest Service and a member of Theodore Roosevelt’s “kitchen cabinet” — strongly believed that the federal government should control all conservation programs. This view was challenged by those who still believed in limited government. Many westerners in particular felt threatened by Pinchot’s aggressive campaigns to keep half or more of the land area of their states in federal ownership. When Roosevelt’s successor, William Howard Taft, appointed former Seattle Mayor Richard Ballinger as head of the Department of the Interior, Pinchot decided to demonize Ballinger as someone willing to sacrifice conservation principles by allowing the transfer of federal resources to private owners.

Ballinger had done nothing legally or ethically wrong. But to keep the subject in the press, the independently wealthy Pinchot maneuvered Taft into firing him from his job as Forest Service chief. This made Pinchot into a martyr for the conservation cause, and helped him to attract 10,000 people to a National Conservation Congress in St. Paul, Minnesota, in 1910.

Most of the delegates at the congress were handpicked for their support of federal conservation. As a courtesy, Pinchot invited St. Paul resident and railroad baron James J. Hill, who had spoken many times before on the need for soil conservation, to speak at the convention. Hill was a strong conservationist, who practiced what he preached. Among other things, he created the Great Northern Railway Extension Service, which taught farmers about soil conservation, paid them to engage in demonstration projects, and donated money to land reclamation programs. But he was skeptical about federal involvement in conservation.

So, rather than talk about soil conservation, Hill used his hour at the Conservation Congress to tear into the idea of federal conservation. Conservation “has come into that peril from which no great truth escapes,” Hill told the convention. “It has been used to forward that serious error of policy, the extension of the powers and activities of the national government at the expense of those of the states.” He proceeded to give example after example of how the states and private landowners were better than federal agencies at conserving resources, emphasizing “the extravagant financial tendency of every federal department and bureau.” “It might be said of certain administrators,” he added, in a clear swipe at Pinchot’s efforts to claim as much of the West as possible for the Forest Service, that “they make a desert and call it conservation.”

Hill’s speech shook up the convention. One of Pinchot’s supporters responded by accusing Hill of hypocrisy because his railroad had accepted federal land grants — although the Great Northern was built without land grants and the only federal land grants Hill ever owned were those belonging to bankrupt railroads that he had purchased at fair market value. Angry western governors led a walkout of opponents of federal conservation to a conference of their own in Salt Lake City.

It was too late. For the next 50 years, the federal government would be the nation’s conservation leader and anyone who challenged that leadership would be demonized as anticonservation.

Except for some debates over dams, this mindset would not be questioned until the 1960s, when the Forest Service and Bureau of Land Management accelerated timber cutting, mining, and livestock grazing on federal lands, often with heavy subsidies from taxpayers. Hunters, hikers, anglers, water users, and others felt betrayed when they saw that agencies created to conserve resources had become the ones most responsible for their destruction or exploitation. To distinguish themselves from conservationists — now a tainted term — these people began calling themselves environmentalists.

When I joined the environmental movement in the early 1970s, it included people of all political persuasions, from conservative Republicans to liberal Democrats. It even included a few Marxists, who were treated by the rest with the same fondness that you might accord to a slightly crazy uncle. There was no litmus test for participation; nuclear engineers worked on antilogging campaigns while loggers worked on antinuclear campaigns and agreed that they wouldn’t have to agree on all issues.

No one questioned government ownership of national parks and national forests, but no one thought that the government was their friend; all their experience had shown exactly the opposite. The goal was to save the planet, and if capitalism would save it, they would endorse that as readily as anything else that might work.

The election of Ronald Reagan coincided with the “sagebrush rebellion,” a backlash of lumber, mining, and ranching interests against the environmental movement, and led to the first serious proposals to privatize federal lands in at least 70 years. Since the privatizers were identified with the sagebrush rebels, most environmentalists automatically opposed privatization. But some recognized that the privatizers had a point: the federal government had not turned out to be the savior of natural resources that Gifford Pinchot had promised.

In the 1980s, I published a monthly magazine called “Forest Watch” that gave a fair hearing to the privatizers and challenged environmentalists who hated federal land management but couldn’t support privatization to come up with a better solution. The only alternative some could propose was to proscribe everything they personally didn’t want to do. “No logging, no mining, no grazing, and no off-road vehicles,” one wrote to me.

Others were more thoughtful. Sally Fairfax, a nominally left-wing professor of natural resources at the University of California at Berkeley, decided to look at how the states managed their land. She found that, in many ways, James J. Hill was right: the states were conservators at least as good as and in some respects better than the Forest Service and other federal agencies. The difference, she found, was that the states often treated their lands as fiduciary trusts, a practice that completely changed land managers’ legal obligations and scope of authority.

Starting with Ohio, the federal government granted lands to most states to sell or manage in order to provide revenues for schools. The courts interpreted these grants as trusts, and placed on the states the same obligations that would be placed on a trustee of the funds that someone might put in trust for their children or grandchildren. Fairfax found that court interpretations of trust law forced state land managers to be both more environmentally and more fiscally responsible than federal land managers.

Meanwhile, in 1988, Island Press published my book, “Reforming the Forest Service,” which proposed to “marketize” the national forests by allowing them to charge fair market value for recreation and other resources, funding them exclusively from receipts, and removing, not adding to, most of the regulations that managers worked under. Recreation would become the dominant source of revenue on most forests, I predicted, and this would lead managers to be more environmentally sensitive even as they produced whatever timber, minerals, and other resources could pay their way.

My proposal received cautious support from many environmentalists, including (at least briefly) the Wilderness Society and a few other major groups. For a time, the only significant opponent was the Sierra Club, which believed everyone should be charged to use the national forests, except for its own members and other wilderness users, who should all get in for free on the theory that they didn’t do any harm to the land. The group’s leaders were immune to my argument that basing user fees on the amount of harm users did would only give the agencies incentives to emphasize activities that did the most harm.

The fall of the Soviet Union persuaded many Americans that socialism didn’t work. Ironically, however, it strengthened the strains of socialism in the environmental movement. In the early 1990s, polls showed that the vast majority of Americans believed that government screwed everything up, but polls also showed that most Americans still believed environmental protection was one of the few things the government could do. So American socialists joined the environmental movement as one of the few places where their big-government programs were still welcome.

“I remember the beginnings of this trend,” says former Greenpeace leader Patrick Moore, “when young activists in army fatigues and red berets began to show up in Greenpeace offices as volunteers.” My own recollection is that people who said they had previously worked as labor organizers showed up to volunteer for environmental groups. They quickly demonized anyone who disagreed with their extreme views and drummed them out of the environmental movement.

Ironically, the strongest resistance to the socialists came from the Washington DC staffs of the various environmental groups. Like any inside-the-beltway lobbyists, these people were essentially incrementalists who didn’t want to lose their seats at the tables of power by proposing anything too radical. But when Bill Clinton was elected president in 1992, the national groups that had based their funding strategies on the perceived threat of a Republican in the White House suddenly lost many of their more moderate members.

At about the same time, liberal foundations such as the Pew Charitable Trusts discovered environmental issues and began generously funding groups that had previously relied on members for support. Thus, the loss of members who did not agree with the extremists had little effect on environmental funding. A few of the foundations were overtly socialist, but I suspect that others simply jumped on the bandwagon because it became respectable within the foundation community to fund environmental causes.

Of course, for the big-government advocates, global warming became the ideal issue. On one hand it is such a complex problem that it is virtually impossible to prove whether or not it is actually happening or what its effects will be. On the other hand, if it is happening, it is difficult to imagine a cure that doesn’t involve the heavy hand of government. So people working on all sorts of environmental problems quickly learned to tie their issues to climate. “To stop global warming, we have to save the forests/stop driving/end the use of plastic grocery bags/shut down any activity that happens to disturb my idea of utopia.”

At the same time, I remain convinced that the environmental movement is not inextricably tied to big-government solutions. Most rank-and-file environmentalists are far from socialists, and even many of the leaders are willing to question government programs if they think they can do it without losing their funding. For many environmentalists, environmental protection remains the goal, and the means to achieve that goal is still open to debate.

Free-market advocates who work on environmental issues are sometimes frustrated with the big-government leanings of the movement and spend much of their time trying to discredit environmental leaders or claiming that environmental problems don’t even exist. To the general public, such environmental bashing is not very persuasive.

A more effective approach is to identify real environmental problems and show how markets will solve those problems better than government regulation. For example, the Reason Foundation promotes road pricing as a solution to traffic congestion and the pollution that is associated with that congestion. The Property and Environment Research Center has shown how improved property rights can protect water for both fish and people. Some of my own recent work has combined the idea of marketizing public land agencies — that is, allowing the agencies to charge fair market value for all uses and funding the agencies exclusively out of those fees — with the idea of turning these agencies into fiduciary trusts that would be obligated to work in the marketplace while they protect wildlife, watersheds, and other resources. Such efforts can be used to build bridges to people who genuinely want to protect the environment and not just use environmental issues to promote a big-government agenda.

  • Share/Bookmark

The Treasury Bubbles Blows On

February 8th, 2010 Jericho No comments

From The Bottom Violation

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.”

– Alan Greenspan

Before he sold his soul and renounced capitalism, Alan Greenspan was one of my heroes, and the above quote exemplifies why. I’m still in shock; the man spent his entire life championing free markets, only to throw it all away near the end. I don’t see how he sleeps at night, knowing history will see him as a sycophantic coward and a political lackey. But that’s a discussion for another day, because right now, guess what I want to talk about? That’s right. Treasuries.

First, Goldman Sach’s chief interest rate strategist in London, Francesco Garzarelli, believes we are not in a Treasury bubble. Do you know how he reached that conclusion? He did it by “mapping one-year ahead macro expectations to long-dated government yields through {Goldman’s] Sudoku framework.”

Work with me here. Goldman is predicting bond prices and yields by employing a popular number-puzzle found in daily newspapers? Am I missing something? Look, being short Treasuries is a no-lose trade; no matter what happens, rates are going higher.

By the way, I’ve heard any number of analysts suggest that the current Treasury bubble is “different” from other bubbles, because it is driven by fear rather than greed. Now that’s just nonsense. There are plenty of traders out there who will be happy to go on the record that Treasury prices are going higher — mainly because they believe the Fed really is going to continue [trying] to hammer the long end of the yield curve. So, they’re still buying bonds. And I promise you their motives have absolutely nothing to do with safety and fear; they’re buying Treasuries for capital appreciation. And guess what? That’s greed.

It’s a bubble. Of the old-fashioned persuasion. Period.

That’s right, this little bond craze isn’t as tame as some people would have you believe, and when it ends, it’s going to end quickly and painfully for anyone who is stupid enough to hold longer-dated maturities. Can you hear the printing presses churning and grinding? Can you? That’s the sound of pure, unadulterated inflation. And it’s coming soon.

So, I’m going to ask the same question I ask every day: who in the hell is going to keep lending the United States money? The Chinese? The Japanese? The Saudis? Do we really think they’re that stupid? The U.S. is about to print somewhere between $2 and $3 trillion dollars — depending from whom you’re getting information. As Rick Santelli, on CNBC, so eloquently put it this morning, “The dollar really doesn’t stand a chance.”

How do you make something more valuable? You decrease the available quantity, or you increase demand. The U.S. government is clearly not decreasing the number of dollars available. So for all you people out there who think the dollar is going higher, what, exactly, do you think is going to spur demand? Further, what force in the universe is going to create that demand at a rate that outpaces the $2 to $3 trillion that are going to hit the economy in coming months? Please do tell me. I am your eager student, and I await your answer with bated breath.

So, in case you missed it in the passage above, there are already many trillions of dollars in U.S. Treasuries floating around the world. Who is going to buy the manifold trillions of dollars more the United States intends to auction this year? I think the brilliant minds at Treasury have fallen victim to the if-you-build-it-they-will-come affliction. Somebody needs to send them an email and let them know that Kevin Costner is a weenie, and none of his movies should be the basis for projected demand at Treasury auctions. Ever.

Rick Santelli, by the way, is the coolest person on CNBC. They should fire everyone else and just let him talk all day. And they should especially fire his bald, Keynesian nemesis. Whatever-his-name-is-that-I-can’t-remember-right-now.

  • Share/Bookmark

Video: Al Sharpton Owns Necons Hannity and Coulter

January 13th, 2010 Jericho No comments

  • Share/Bookmark