Monarchy is an endangered species. Once the only form of government, it is now gone except in a few countries where it is kept alive for sentimental reasons with US mercenaries and drones (e.g. Kuwait and Saudi Arabia). Republican government is also extinct for all practical purposes, being confined to Switzerland's cantons and a few micronations. The most common form of government today is the Kleptocracy — rule by those who control the means of currency creation.

The US is a Kleptocracy, and has been since before World War One. Who cares who their Congressman is, or which party controls the Presidency? Most people can't even name their Federal Senators or representative, let alone the state-level officeholders. But everyone knows Ben Bernanke's name, because he's the guy who MCs the most popular game show: Who Gets to be a Billionaire?

Once the US was a place where people became wealthy by producing a new and better product or service. Vanderbilt, Carnegie, Henry Ford, all created new wealth and made others better off in the process. Even after the Kleptocracy was founded, some entrepreneurs managed to continue the tradition of "insanely great products": Wozniak, Jobs, Bezos, and the other computer whiz kids.

In the 21st century, starting a business in the United States is a loser's game. First a corporation must risk its capital with no guarantee against loss. If the business survives and manages to create something more valuable than the resources it consumed to make it, then most of the gains are taken by government. A corporation pays 35% in Federal tax, then pays state income tax. Then the investors pay 15% income taxes on their dividends, and capital gains taxes on the nominal "increase" in value of their shares… not adjusted for inflation. And if the investors actually try to USE "their" money inside the US, they are then taxed again with sales, property, and/or excise taxes. Correcting for the possibility of investment losses, the investor gets far less than half of the value that she created with her investment.

The Obama Administration is trying to increase the double taxation by taxing dividends at the full (39%) rate of ordinary income. (By comparison, "communist" China only taxes corporate income at 25% and dividends at 10%). This of course, is only for those losers like you and I, those not a member of the Kleptocrat's Club.

For members of the Club, life is a continuous success story. It doesn't matter whether your products are terrible (GM) or even imaginary (Goldman Sachs). All that matters is the continuing flow of freshly printed money into your business. It's like being a medieval noble; you can do no wrong. The courts will always find in your favor, you are never subject to the humiliations of peasants (airport security, police raids, etc.) All that you need is a little modification of language: "counterfeiting" becomes "quantitative easing", "theft" becomes "stimulus", and so on. After enough repetition, the peasants will believe that your wealth causes the Sun to rise in the morning, and that they must thank you for allowing them to pay for your palaces and the subsidies for your unprofitable businesses.

So the goal of modern social climbers is to become part of the Club. If you can't arrange to be born into the families that control access to the national Club, you can still have a consolation prize: you can start a state-level business subsidy office. There are hundreds of these humble little state-level kleptocrat clubs around the US. Some are called "economic development zones", some are called by various department names. Today we'll take a quick look at the New Hampshire Business Finance Authority.

Kleptocracy in the "Live Free or Die" State

The NH BFA has the distinction of being more secret than the NSA. There isn't even a Wikipedia article on the Business Finance Authority. Nor are any of its financial statements online. I had to make a 91-A request to obtain its annual reports to the governor. As the state refuses to put the annual reports online, the NH Liberty Alliance will soon have them on its website, in our continuing struggle for transparency.

So there won't be any links in this article. If you want to check my figures, just email the director, good old Jack Donovan jackd@nhbfa.com. If that doesn't work, go over and pound on the door at 2 Pillsbury Street Suite 201 Concord, NH 03301. (603) 415-0190. The staff loves to hear from the ordinary people that pay their salaries.

According to the first page of the 2011 Annual Report, the BFA has transferred over 1.4 billion dollars from we lazy, undeserving taxpayers (and all holders of dollar balances) to those who truly earned the money (by filling out BFA forms). The BFA states that it has "helped" 4,375 businesses since 1992. I'm sure that is true. Unfortunately, the report fails to mention that the BFA HARMED all the other businesses and workers in the state, by granting and/or diverting money to the politically favored.

Lucky Winners:

Anheuser-Busch, 12 million dollars, in 2011. Anheuser-Busch is actually owned by InBev, a Belgian-Brazilian beer conglomerate which bought the Clydesdales for $52 billion in 2008. Obviously, this is a company which needs to be subsidized by NH state government. Otherwise Granite Staters might have to drink Sam Adams or some local microbrew that actually tastes like something.

Lonza, the Swiss biotech company, $35 million in 2011, $25 million in 2006, $30 million in 2003.

Waste Management, the garbage giant: $20 million in 2001, 20 in 2002, 15 more in 2004.

Sig Arms, makers of fine pistols (except for early model P238s), got $1.75 million in 2003.

But the BFA doesn't just help big business. It also helps upper-crust schools and government media outlets.

Kimball Union, a private school that charges over $46,000 per year per student, got over a million in 2001. This is a critically important use for money that might otherwise be wasted on less important children in the other private schools around the state, most of whom charge less than 12K per year.

Seacoast United Soccer got 3.7 million.

NH "Public" Radio got $6 million dollars in 2008 to help fund its mission to elect more Democrats in New Hampshire.

And speaking of Democrats, the BFA bought some Pennsylvania company a nice NH newspaper, the Claremont Eagle Times. It was reported at the time as costing only $187,000, but the annual report (which, remember, is not online) shows it as 250K. The town of Claremont voted for Ron Paul in the NH primary, but you'd be hard pressed to find any signs of Ron Paul supporters in the Eagle Times.

Reverse Robin Hoods Gone Wild

So "business" has become a euphemism for robbery, as are the words "bond" and "loan guarantee". The Business Finance Authority doesn't show up as a line item on the NH state budget. It does give out some direct freebies, like weatherization grants. But mostly it works in the shadows, by "guaranteeing" bonds, and/or granting the right to certain corporations to issue tax-exempt bonds. Being tax-exempt "lowers the cost of financing", the BFA helpfully explains in its reports (apparently the wealthy recipients would not be clear on this otherwise). Overall, so far the BFA gave out $399 million in loan guarantees, and $1.008 billion dollars in tax-exempt or other subsidized bonds.

The BFA has long lists of "impacts"; numbers of jobs created, number of jobs preserved, how many "Local Development Organization Loan Pools" they funded. Mr. Donovan, the director, was very concerned that I might ask him for the figures on the "loan loss rate". He needn't have worried. The "loss rate" on any government program to steal from one business to give to another is always 100%. Once business becomes robbery, everything is lost: honor, trust, your soul, etc.

New Hampshire has fewer business subsidies than most states. There are hundreds of euphemistically named subsidy organizations, large and small, around the US. Taken together, they have taken "business" more than halfway from being the engine of human life to just another parasitic scam.

Am I saying that businesses shouldn't take subsidy money? No. Once your opponent picks up a knife, the game of chess is over and you have to play by knife-fight rules too. I'm saying that all our political efforts have to go into exposing, then eliminating all subsidy programs and prosecuting their perpetrators. Supporting business subsidies as policy doesn't make you a "good Republican"; it makes you a thief.

Bill Walker [send him mail] lives and works in New Hampshire, where he is active in the New Hampshire Liberty Alliance. Visit his Facebook page.

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The US is about to launch yet another undeclared war on yet another eastern front, this time against Iran. Supposedly our permanent state of war is necessary to "stop the next Hitler"…. in other words, the way to prevent a Nazi regime from arising is to launch surprise attacks on small countries, round up Semitic scapegoats and put them in secret camps, spy on our own people with 17 Gestapo-style intelligence agencies, build a series of invincible robot wonder weapons… wait just a darn minute here. I think our foreign-policy cooks are using the wrong recipe book.

In order to prevent another Hitler, it is necessary to know how Hitlers are made. The National Socialist recipe is in the public domain, available in any historical cookbook. Let's go into the kitchen with master chef Woodrow Wilson and watch the Nazi soufflé rise.

Hitler: Created by US Intervention, Kept in Power by England and France

Germany and France had fought a war in 1870. Some expendable soldiers died, a few civilians were collateral damage, and a couple border areas changed hands. Overall, the war changed nothing, and after the war Europe returned to peace and business as usual.

In 1917 World War One was on track to burn itself out in similar fashion. Both sides were war-weary; common people had been reminded that being gassed and ripped apart by artillery isn't really as fun as it sounds. Another peace of exhaustion was in the cards, helped along by military technologies which favored the defender. Trench warfare and railbound supply lines made successful aggression difficult. Millions of troops died without changing the front lines very much.

Woodrow Wilson saved the War To End Wars with a major media campaign and 2.8 million drafted Americans. Funded by the recently created Federal Reserve, the US poured fresh troops and money in to support the British and French empires. This allowed Clemenceau and Lloyd George to launch a total war against the German civilian population.

The Germans signed an Armistice on November 11, 1918. However, the Allies didn't stop fighting. They used their fleets to blockade (nowadays we would say "to impose sanctions") Germany until July 1919. At least a quarter of a million Germans were killed by starvation and disease during the blockade.

Backed by their invincible US mercenaries, the French and British looted Germany. The Versailles Treaty prevented economic recovery and any return to normal trade for Germans. The Weimar government tried to pay its impossible foreign debts by inflating the mark, destroying the middle class and discrediting capitalist values like honesty and saving. Socialism of different stripes became the only ideology in Germany.

Without the Versailles Treaty, Hitler would have become a house-painting contractor or maybe a minor artist. Under the Treaty, he became a Messiah. People are evolved to live in tribes, and their default setting is xenophobic tribalism. Germans simply reset to the default setting, as other peoples from Japan to Rwanda have done under economic stress.

After Hitler came to power, the other powers jumped in to… help him. Britain and France pressured the Czechs to cede a strip of land (which coincidentally contained the Czech defense fortifications). After the Czechs were rendered defenseless, Poland and Hungary annexed parts of Czechoslovakia, helping Germany finish it off.

The interventionist policies of the other world powers also helped Hitler make Europe Judenfrei. Britain and France refused to allow most Jews to escape. Even in 1938, at the Evian Conference, the nations of the world continued to restrict Jewish immigration. The US used its navy and coast guard to turn back ships full of escaping Jews. Without these active government interventions, most of the Jews of Germany could have escaped the Holocaust.

So Hitler was created by interventionist foreign policy and war, then enabled by more interventions. After he finally attacked his benefactors in open warfare… they still worked hard to keep him around. The Springfield-toting sniper in Saving Private Ryan asks a simple question: why not send him to shoot Hitler, instead of shooting one German draftee at a time? It's a very good question.

Saving Corporal Hitler

Did the heroic Allies actually try to remove Hitler and save the Jews, as our current mythology implies? Or did they treat him as just another member of the club, a good ol' boy engaged in the gentlemanly arts of demagoguery, war, and tax collection? Roger Moorhouse has collected all the attempts on Hitler's life into one volume. The book is fairly short for lack of material; in general, governments made no serious attempts to kill Hitler. We know they could have, because one construction worker almost succeeded with no assistance.

In 1938, an ordinary German carpenter named Georg Elser was convinced that Hitler was going to plunge Germany back into war. Elser decided to kill Hitler and save the world.

First, he traveled to Munich for the observance of the November 8th anniversary of the 1923 Beer Hall Putsch, an important Nazi holiday. Hitler was obliged to give a speech at the Burgerbraukeller for these festivities. Elser simply went in afterward and bought a beer. He observed the position of the speaker's lectern and the structure of the hall. Then he went home and got a job in a quarry that used explosives.

In August 1939, Elser moved to Munich. Every evening he bought dinner in the Burgerbraukeller. After each dinner he hid in a storeroom until the employees left. Then he emerged and worked all night, constructing a hidden cavity in a pillar behind the speaker's dais. On the 2nd of November 1939, he installed a large homemade bomb. On November 5, he set the timers for the evening of November 8 (remember this is a punctual German bomb, it had a backup timer).

On the evening of November 8, Hitler entered the Burgerbraukeller and gave his speech. Unfortunately he was an hour early. Due to bad weather, he had decided to use the train instead of displaying his high-tech flair by flying. So he left the hall at 9:07. Elser's bomb went off exactly at 9:20, not only blasting the lectern but bringing the whole gallery down onto the dais. Instead of killing Hitler and other high-level Nazis, he got only a few low-ranking supporters.

Elser missed… but not by much. He demonstrated that any individual who put a few months of their time into killing Hitler would have a pretty good chance of success. Unfortunately, as the rest of Moorhouse's book shows, the major governments of the world never spared as much as one full-time carpenter to kill Hitler. Stalin put elaborate assassination nets in place, but then carefully avoided any harm to Adolf, probably fearing that a less crazy leader would make Germany more powerful.

The democratic Allies did no better. The British demonstrated that they could assassinate even the highest-ranking Nazis deep inside Eastern Europe, by killing Reinhard Heydrich. They produced James Bond weapons like the Welrod pistol and distributed them to resistance movements, and assassinated Nazi small fry all over Europe. But though they did a feasibility study ("Operation Foxley") on shooting Hitler at his retreat in the Alps, they too left him strictly alone. On April 25, 1945, the British finally made some PR shock and awe by sending 375 bombers to blast Berchtesgaden. The results were the same as the attacks on Saddam Hussein at the beginning of the Iraq War; the dictator was nowhere nearby.

The American war leadership followed the British lead. They preferred to spend billions on bombing ordinary German civilians rather than sending in one sniper to Berlin. (Killing Hitler makes it plain that Hitler drove openly around Berlin until quite late in the war; he would have been no harder to hit than Heydrich). Hitler was left to pursue his campaign against the Jews to the very end.

Governments, whether "democratic" or openly totalitarian, are all driven by the same evolutionary laws. They gain power by maximizing the length and cost of wars.

"War is the health of the State" is a truism because it is true. Governments create and maintain Hitlers; if they remove one it is usually only to install another. (Ask the Poles and the Czechs how much they "benefited" from World War II… unlike switching to Geico, switching to Stalin didn't save them hundreds of thousands of lives).

Hitler only died as an accidental byproduct of the financial and political machine that was World War. If he had actually used the WMDs that he had built to win on D-Day and/or at Kursk, he might have come to a Cold War accommodation of his own and lived on to die of old age. As it was he simply failed to be a strong enough bogeyman, and was replaced by Stalin and Mao… each of whom killed far more people in peacetime genocides than Hitler.

Mao alone killed around 77 million Chinese according to historian R.J. Rummel. Maybe Mao should take Hitler's place as the generic epithet for politician… but he won't, since he didn't lose. In fact, he went on to enjoy his palaces and harems and die at a ripe old age, much to his own surprise.

After World War Two: Let a Thousand Hitlers Bloom

Since 1945, the US has given foreign aid to most of the world's genocidal dictatorships. Pol Pot was on the US dole, even after achieving the all-time record for "proportion of population killed". Castro was given massive aid after the Bay of Pigs…. and the biggest job security boon to a Latin American dictator ever, in the form of US trade restrictions that kept Castro economically dominant and most Cuban homes free of VCRs.

Ho Chi Minh got a chunk of change from the US after the Vietnam War, although most of his support before that came from Warsaw Pact countries that borrowed the money from US banks. Idi Amin, Julius Nyerere, Robert Mugabe, Mobutu, Charles Taylor… you can just call the roll of dictators and not risk hitting one that wasn't on the take from official US foreign aid.

Official foreign aid, like the current official US national debt, is just the tip of the iceberg. Unofficial aid can't even be easily tracked. All a dictator has to do is borrow money from a US bank; with a wink and a nudge from the Federal Reserve, he's on foreign aid that won't be on the books for twenty years, and even then not without a real audit of the Fed. This is how "socialist" regimes can exist with no visible means of support; they don't need a domestic market economy as long as they have their foreign-aid credit card.

So let's drop the pretense that US intervention is about "stopping the next Hitler". Our taxes and borrowings and printings and flat-out imaginary wild promises support a worldwide network of little Hitlers, from the ex-Soviet Afghan warlords to the nuclear-armed god-kings of North Korea.

If we want to "prevent the next Hitler", we first have to stop US foreign aid to all the little Hitlers of the world. Then we have to stop our home-grown Goebbels and Goerings from bankrupting our country with wars on every front. The "next Hitler" is us.

Bill Walker [send him mail] lives and works in New Hampshire, where he is active in the New Hampshire Liberty Alliance. Visit his Facebook page.

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The USPS employs a larger horde than Genghis Khan: 656,000 union members driving 260,000 vehicles. It is the second-largest employer in the United States after Wal-Mart. It has a government-granted monopoly on first class mail. In 2007 an FTC report noted that the service does not pay taxes, including property tax on its 38,000 facilities; does not pay vehicle registration fees, and can borrow at subsidized interest rates from the U.S. Treasury.

And they do borrow… which is how they get away with claiming that they are "not subsidized". They don't get subsidies (except in some years, when they do), they just get loans… and more loans… and more loans. Maybe they should join up with Bank of America or Goldman Sachs and add subprime mortgages to their services at the stamp window.

In 2010 the USPS lost $8.5 billion dollars by its own accounting. These enormous losses were covered by these taxpayer-financed "loans", which it has no intention of repaying. It also has failed to fund its pension account, which is billions in arrears. Now it wants to reduce services, increase prices for magazine delivery, and would also like some more direct subsidies. And no doubt, some more loans.

According to Martha White of msnbc.com, the USPS horde carries… 15% of all parcels. (The vast majority of packages are delivered by two private companies. UPS has about 400,000 employees, FedEx about 140,000, and of course the companies pay taxes). So the vast USPS army isn't actually vital to the day-to-day operations of US business at all. If the USPS disappeared tomorrow, UPS and FedEx would simply take up the slack without blinking. The USPS could sink beneath the waves of bankruptcy without a ripple.

The only argument the USPS makes in favor of its permanent drain on the US economy is that it provides "universal service". What that means in practice is that the millionaires living off the road around Lake Coeur d' Alene get a cute little boat to deliver junk mail to their boat docks. Less important people in NH rural areas get "delivery" to the end of their road (under the %$#! snowdrift), if we're lucky. Why it is vital for working people living in cities to subsidize millionaire boating enthusiasts or eccentric New Hampshire woodsmen such as myself is not clear. Nor is it clear that private companies wouldn't leap at the chance to deliver first class mail very cheaply if it meant they could also deliver advertising… in a free market I might have to modify my woodstove to run on junk mail.

The more sinister side to "universal service" is that the Postal Service was historically a vehicle for implementing censorship. Anti-slavery literature, birth control information, and antiwar publications have all been subject to postal censorship. Monopoly meant that you couldn't just choose another carrier; your ideas were blocked.

So if the USPS isn't necessary for package delivery, and the only reason that UPS and FedEx aren't delivering our mail is that they aren't allowed to… why not just let the Phony Express out of the corral? Make it a private corporation, give the employees the stock, and let it compete.

Would this be "fair"? No, of course not. The union employees don't deserve ownership of the postal infrastructure; it was all paid for by the taxpayers. However, just because the USPS is overstaffed and overpaid, it controls a lot of votes. This political strength is the only reason the USPS still exists. If we could eliminate the albatross by giving away the USPS infrastructure, it would be a great deal for the taxpayer… after all, right now it's costing us nearly ten billion a year to subsidize it.

Once the USPS is privatized, it will have to pay taxes, and then those 656,000 employees will suddenly have a whole different viewpoint on how high taxes should be. The toxic political effects of having a privileged state monopoly in the middle of US society will be gone.

This is the perfect time to privatize all the sacred monopoly cows. Our country is bankrupt, and even most politicians want to have a functioning economy from which to steal. Look at Jimmy Carter; after his overspending and inflation drove the economy into a recession, he deregulated airlines and trucking, eliminating price controls and route allocations in both industries. There is no reason our current politicians couldn't emulate his example (although it might be easier for this to happen if Americans remembered that it was a depressed and humbled Carter that freed those industries, not the deficit-boosting Saint Reagan).

The USPS isn't the only bovine monopoly grazing on our economy; there are also power companies, cable companies (oddly enough, cities and states with competing cable companies have lower cable prices), local phone companies, water utilities, and other Soviet-style organizations. And what is the common factor shared by all these monopolies? They're all implemented by governments, without whose help these inefficient dinosaurs would be quickly eaten by customer-service-driven competitors.

The only monopolies we have in this country are those created by government. Telephone, electric power, cable TV, first class mail, and other monopolies weaken our economy and make us more vulnerable to loss of service in disasters. (How is it good that everyone in an area loses power or phone service at the same time? How many lives have been lost because of lack of u2018redundancy' and backups, i.e., competition?)

End all government monopolies, and let everyone compete on their own merits.

Bill Walker [send him mail] is the co-chair of the Ron Paul campaign in Sullivan County NH. He is active in the NH Liberty Alliance.

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New Hampshire's judicial branch recently announced an attempt to recapture business law from private arbitration. It's quite hopeless; even the one judge assigned to the quixotic charge of this judicial Light Brigade admits that he doesn't expect many businesses to use his court. And they won't.

Why would anyone leave the relatively rational, honest, quick world of private arbitration for the endless delays and corruption of government courts? They wouldn't. Even if they disagree with any one decision of a private arbitrator, at least the case will be OVER and they can get on with their business. That doesn't happen once you sink into the tar pit of the US judicial system (ask my brother-in-law about his four-year divorce case…) As one of the NH Supreme Court judges said, "businesses don't use state courts."

But it goes further than that. Wealthy people and corporations don't use state facilities of any kind when they can avoid them. The wealthy, including those in charge of inflicting government programs on the rest of us, use private services for themselves:

First and most important, the wealthy send their children to private schools. Even the Clintons and the Obamas sent their daughter(s) to private school, while talking loudly about the importance of keeping school vouchers away from working people. Many private schools may cost less than public schools, but they're far better for the students in any measurable outcomes. And of course it's easier to stay wealthy if you have a decent education.

The wealthy don't get felt up by TSA or blasted with x-rays; they use private aircraft. Because of course private jets [or private suborbital rockets] could never be loaded with explosives and used to take down a skyscraper… errr, um….

The wealthy don't depend on government police. They have bodyguards and private security for their homes. Private guards, of course, enforce private law… the wealthy don't have to fear the Drug War unless they forget themselves and stray into "public" territory.

The wealthy may claim to be for gun control, but their guards are their weapons… and their guards are armed. Even when they go overseas in government service, the wealthy are protected by Xe ("the company formerly known as Blackwater") or some other mercenary group.

The wealthy don't depend on government health services. They don't go on two-year waiting lists for treatments or transplant organs. They just fly to wherever the medical services are available. They don't wait all night to beg a doctor to prescribe an antibiotic for their strep throat, either… they just have a private doctor get out of bed and get them some, or they fly to a country where the pharmacists are actually allowed to practice.

Some of the wealthy even travel to the future for better medical care… of course they may become some robot's pet, but is that worse than the emergency room at Parkland?

The wealthy don't depend on government fiat money or bonds for their savings. They diversify into assets in different countries. Even their accounts are hidden in the Caymans or other havens. Inflation can only affect the small amounts they keep for everyday use; most of their money is in ownership of companies with real assets, or in hedge funds. And of course many have an emergency stock of gold.

Unless victim of temporary hormonal insanity (which of course does happen), the wealthy don't end up in four-year divorce cases. They write their own contracts, pre-nups, specify private arbitration, etc.

The wealthy, obviously, don't depend on Social Security, or unemployment, or the rest of the supposed "safety net." And that makes them a lot safer.

So the wealthy live as anarcho-capitalists, even those dependent on corporate welfare or even holding official positions within a government. They get by without all the "vitally important government services," even those of the central banks, courts, police, and armed forces. Perhaps this is why so many of the wealthy advocate more socialism; they don't live under it.

Don't Envy the Wealthy, Join Them

My point is not that we should all stand around consumed by envy and bloated by cheeseburgers like Michael Moore. It doesn't hurt me if someone else has more money…in fact it helps me a whole lot. It's really hard to sell products or services to poor people, and fundraising from them isn't that productive either.

And while the wealthy live with more private services than we do, they only live in ersatz anarcho-capitalism. They may have private airplanes, but they can still only go as fast as our grandfathers did in 1960 in 707s. They may go to private doctors, but overall medical progress is still held up by the FDA, so they still get cancer. They may have private security against carjackers, but governments still have nuclear weapons, nerve gas, Ebola/flu, and billions of dollars' worth of lethal pro-war propaganda.

However, joining the wealthy is a worthy goal (assuming we do it by producing a good or service and not by rent-seeking). Being wealthy may not guarantee you a life free of government interference, but it does mean that you'll have the resources to make an impact on the world. Web publishing is cheap, but it's hard to get people to listen to you if you're poor… they assume that if you knew what you were doing, you'd be better off. You don't have to spend money to have credibility, you just have to accumulate it.

You may say that "wealth is relative." Not really. If you're a millionaire, some billionaire may have a thousand times your wealth, but you can still afford private schools, private arbitrators, and private medical care. Once you escape dependence on government services, you are "wealthy" in an absolute sense.

Most of us can reach the level of productivity needed to escape most government "services." It just requires that we live the economic lessons that we supposedly learned from all those free-market economics texts on our shelves. That means that we don't become hermits and ignore the division of labor, comparative advantage, and the necessity to live by the sweat of our brows. (Yes, I'm talking to you, Ron: it's time for you to give up lion taming and go back to chartered accountancy!)

Anyway, even the "socialists" nowadays have mastered the practical ways of capitalism and live in a relatively free-market world. It's time more libertarians joined them.

Bill Walker [send him mail] works for the medical imaging company M2S. He lives with his wife Patricia in Plainfield NH, where they are active in the New Hampshire Liberty Alliance.

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As of March 2011, China is building 27 new nuclear power plants (and plans 50). Russia is building 10, India and South Korea five each, Japan and Canada two. In the US, there is exactly one new reactor complex being built.

France gets 80% of its power from fission. Most major nations have used nuclear power to make their environment cleaner and their economies less vulnerable to $100/barrel oil. Yet the US remains in superstitious dread of fission… even while dependent on the 20% of our electricity that comes from our 40-year-old Homer Simpson specials.

US Nuclear Industry: From Pollyanna to Panic

The US built the first nuclear reactors. We even built the first nuclear rocket engines, way back in the misty pre-Internet days of the 1960s. (It was misty from all the coal and high-sulfur diesel smoke). Why did we turn into a nuclear backwater? Because the US government in all its genius "helped" nuclear power with subsidies.

The US government shoved nuclear power into use in the 1960s, before it was ready for prime time. Early reactors and their fuel were subsidized, and the Price-Anderson act dumped the liability for accidents onto the taxpayers. (Taxpayers do seem to attract liability for everything from subprime mortgages to shaky foreign dictators, don't we? It's a wonder we can get insurance at all…)

Then, once nuclear technology actually became reliable, US policy turned against it. Our new electricity needs are now met almost entirely by frantic construction of fossil-fuel plants, while we publicly bemoan the potential problem of Global Warming from those very fossil-fuel plants.

US nuclear power was killed by media-generated fears. Most of those fears were imaginary, and all were exaggerated. But fear still trumps the actual numbers. It's time for a look at the current realities of nuclear power.

Not Your Grandfather's Reactor

The first hard fact about switching to nuclear power: it reduces your radiation exposure. Nuclear power plants, even old ones, release very little radiation. In fact, they release from 100 to 400 times less than coal plants, per kilowatt-hour. (There is a significant amount of radium and polonium in coal). You get more radiation by escaping to NH from Vermont than you would by living next to a reactor for your whole life (manly NH granite is full of uranium and thorium, unlike the soft, limp sediments of Vermont).

So the net environmental effect of US anti-nuclear policy has been… to raise our radiation dose for the last 30 years. But don't worry; compared to the tons of mercury and vast quantities of organic chemical carcinogens released by the coal smokestacks, the trivial extra radiation from coal doesn't matter. Of course, in addition to cancer there is the little matter of Global Warming CO2 from fossil fuels. Nuclear plants are entirely carbon-free (which will be a good thing in a few centuries, once we get enough CO2 into the atmosphere to stave off the Final Ice Age).

New nuclear plants are also meltdown free. There are several ways to make nuclear fuel rods or pellets that stop fissioning when they reach a certain temperature. The US built the first intrinsically safe reactor in 1986, the Argonne EBR-II. The Argonne system used fuel rods made of an alloy that expanded with heat to beyond critical density. Newer designs have used pebble beds and Doppler scattering, but the result is the same: fuel elements that shut off over a certain temperature, even if Homer Simpson turns off every cooling system.

Yet another breed of new nuclear plants uses cooling systems which use convection instead of pumps; again, even if everything is switched off, they can't overheat. The Westinghouse AP1000 uses this principle. (The Westinghouse nuclear division is now owned by Toshiba, a company that thinks more than one fiscal quarter ahead.)

Other concepts include small mass-produced reactors like the Hyperion. These town-sized (only 25 megawatt) units would be more decentralized than most current fossil or nuclear generators. They would also have passive safety features… in fact the reactor itself is a sealed unit, with no way for Homer to get inside.

The US has none of the newer, safer plants yet (the one reactor under construction in Georgia is an AP1000). Yet just like the ex-Soviet satellite nations, we remain economically dependent on our 1970s reactors. Again, our anti-nuclear policy has put us at more risk than other nations.

No Recycling Allowed

Then there's nuclear "waste". Nuclear fuel rods are about 3% uranium-235 when they go into a light-water reactor. They quit producing energy when they are roughly 1% uranium, 1% plutonium, and 1% radioactive elements like strontium-90 and cobalt-60.

In other countries the rods are removed from the reactor, the uranium and plutonium are recycled into new fuel rods, and the other radioactive elements are used by industry for various purposes. Excess non-fissionable isotopes can be mixed with Pyrex glass and made back into radioactive "rocks"… which, after all, is what uranium ore is in the first place.

But in the US, no nuclear recycling is allowed because of Carter-era regulations. Used but radioactive nuclear fuel rods must stay in open ponds outside the reactors just in case terrorists might need some. Thus the US has a "nuclear waste problem", while other nations do not.

Speaking of recycling, it's hard to do much recycling of any kind without electric power. Conversely, cheaper and more plentiful electricity will make recycling profitable…. and thus universal.

"Peak Uranium" A Long Way Off

Currently known reserves of uranium are enough for a couple hundred years or so… enough that no one puts much effort into finding more. Breeder reactors can make more uranium out of thorium; estimates of thorium reserves get us up to 20,000 years. By the year 22,211, fission reactors will be in museums next to the flint-knapping tools. The lights will stay on from fusion… or more likely, something we haven't even imagined.

Even on a shorter time scale, nuclear fuel cycles are very stable. Once fueled, a reactor will run for years, independent of possible wars, blockades or interruptions of trade.

Obama: Nuclear OK As Long As It's Taxpayer-funded

On February 16, 2010, President Obama announced $8.33 billion dollars in federal loan guarantees to construct the two AP1000 units at the Vogtle plant in Georgia. This continues a long tradition of meddling and favoritism (in other countries, we call giving tax money to private companies "corruption"). Corruption of course knows no technological boundaries; all forms of power production have been distorted by subsidy.

Time For A Level Playing Field

Nuclear power is the cleanest rapidly expandable source of electricity. It produces no greenhouse gases, no acid rain, no chemical pollutants. It doesn't need ecologically disruptive dams. It doesn't cover up thousands of square miles of forest with solar panels, it doesn't kill migrating birds with eyesore windmill blades.

But is new nuclear technology better than other alternatives? That is the question that matters, and it can only be answered by the market. Let all power technologies compete against the same safety and emission standards, and all be liable for any damage they cause. Let coal plants have to meet the same radiation emission standards, and let non-subsidized solar plants pay for the forest land they cover up (and for their own capital costs).

Since the Congress and Administration can't seem to find anything to cut from the budget, here's a suggestion that would save a few billion: cut all corporate welfare to all forms of energy companies. Government bureaucracy is no more likely to pick the right technology this time than in the 1970s, when they decided to leave the US forever dependent on burning coal.

The "right technology" depends on time and place. Solar cells are fine, if they're covering buildings in Albuquerque instead of snowy forest in Vermont. Windmills, wood-burning plants, methane from cow pies, whatever can pull its weight on the market is great.

But neither windmills nor wood chips will take us to the stars.

Bill Walker [send him mail] is a research technologist. He lives with his wife and four dogs in Grafton NH, where they are active in the Free State Project.

Bill Walker: Archives

According to the 2009 OECD figures, the US government spends more per pupil than any nation in the world except Switzerland. The US spent an average of $149,000 for the K–12 education of every 2009 public high school graduate. That works out to $11,461 per year or so.

So the solution is obvious: shut down the schools and invest the money instead. Just let the kids stay home and study on the Internet. Let's even save some money to reduce the deficit, and only invest $11,000 per year. At 7% return, each child would have a $391,000 IRA when they're 18. That way, even if they spend the next 50 years surfing or hiking the Appalachian Trail, they would all retire at 68 with $12,512,000 (assuming the same 7% average yearly return). This solves not only the education crisis, but the Social Security problem (they wouldn't need it) AND the health-budget crisis (how much heart disease could there be, if everyone spent their time surfing and hiking?)

So we are spending a really staggering amount of capital on public schools. How's it paying off for the lucky recipients?

Not so well. While at the top rank in funding, the US is not exactly at the top of educational achievement. In the 2010 PISA report, US students placed 25th out of the 34 OECD countries in math.

Only 77.5% of US students even graduate from high school. If that seems frighteningly low, it is… West European graduation rates are closer to 90%, and that doesn't count the many Europeans that enter industrial apprenticeship programs.

Districts that spend more money don't necessarily get better results. The Washington DC school district spent $28,170 per pupil in 2009. The graduation rate was around 72%, even worse than the national average.

So if throwing in more money doesn't work, what does? Less money…. As long as it comes with more freedom. For concrete examples, I'll use my adopted state of New Hampshire, home of the New Hampshire Liberty Alliance.

Like the rest of the country, New Hampshire doesn't economize on public education. From the NH Dept. of Education web site: "The per pupil amount of all expenditures — operating, tuition, transportation, equipment, interest, and non-K–12 expenditures is $13,914.96." (For the 2008–2009 school year, the most recent published). The 2010–11 figure will be far higher, well over $14,000, if only because interest expense will skyrocket. Much of the state operating budget was borrowed in the last two years… fortunately the legislature which went into debt was largely replaced last November, in part due to the NHLA.

Everyone knows that private school students get better academic scores. So everyone assumes that they must be very expensive. That assumption is wrong. Looking around at how much good private schools actually cost around NH:

The Well School in Peterborough charges $7,360 for grades 1–4 and $8,800 for grades 5–8. Pine Hill Waldorf School in Wilton is $12,160 for grades 1–8. Monadnock Waldorf School costs $7800 for all grades. Here's the fee schedule for St. Joseph Regional in Keene: "Tuition for grades K-8 for Catholics is $3,153, and $4,412 for non-Catholics. There is a 5 percent discount for one-time payment in full, and a discount for multiple children from a family."

The Tilton School charges $17,300 for grade 9–12 students… but they offer an indoor hockey rink, a full size theatre, a Creative Art Center and access to Gunstock ski resort. When do the students have time for math with all that skiing and hockey, anyway? But it's true, if your private school only spends $8000 for grades K–8, you can splurge a little on the prom and the ski lodge when you're a senior.

We NH taxpayers are paying MORE per pupil than many private schools charge. We have plenty of money to give our children great educational opportunities. But we are turning it over to a system with no options for parents or innovative teachers. A system with no competition or choices is a system doomed to fail.

The situation is the same everywhere in the nation. We are spending enough money to give every child a good private education… and if the parents could get the money, no doubt they would do just that. If those Washington DC parents ever actually get their hands on that $28,170 per child, their children will quickly be breaking their legs on the ski resorts too (which will give them plenty of time to study their AP calculus).

Of course the moral and practical solution is to leave education to the free market. Parents would pay for their own children, voluntary charity would pick up for the children of the unlucky or improvident few. There would be as many educational options as there are children.

But the debate today is framed by the Department of Education and the teachers' unions. They constantly shriek that "education needs more money." Fine. As a first step, let's just agree with them. Education does need more money… and the only way to get more money for actual education is to give it to the parents, not the bureaucracy. Let the NEA explain why it's OK for politicians' (and NEA members') children to go to private schools, but the children of working people have to go to some of the lowest-quality public schools in the developed world….

And pay more for it.

Bill Walker [send him mail] is a research technologist. He lives with his wife and four dogs in Grafton NH, where they are active in the Free State Project.

Bill Walker: Archives

As Mark Zuckerberg says near the beginning of The Social Network, Teddy Roosevelt got his start through the contacts he made in Harvard’s Porcellian Club. Poor Zuckerberg never fulfills his Final Club obsession and is condemned to go through life as a mere outcast Facebook billionaire. He will never know the joys of standing around a ratty billiard table, looking out over the Boston slush from the “Old Barn." Unless he just buys the block and "makes it into his ping-pong room," that is.

Teddy, on the other hand, successfully avoided the ignoble and politically disastrous trap of producing something useful for money. He became a millionaire the Addams Family way… by inheriting and then losing much of tens of millions of dollars (in today’s money). Teddy built a political career rather than wealth. In the process, he caused disaster for several Asian nations, set the stage for WWII in the Pacific, and started a trend of faux-cowboy presidents. The Imperial Cruise is about the effects of Roosevelt's PR campaigns and how they began our long series of Asian wars.

Until his twenties, Roosevelt was no cowboy by anyone’s standard. He showed up for his NY assemblyman’s seat (purchased for him by his family when he was 23, still a NY record) in a purple suit and speaking in a high squeaky voice. If video recording had existed, his political career would have ended right there.

But the 19th-century memesphere had no video records. Image could be reworked easily, if you had the money. Roosevelt began a systematic lifelong media campaign, presenting photos of himself in custom-tailored, spotless buckskins and military uniforms. He forbade any photos of himself in tennis whites. He was horrified at Taft’s sloppy PR (Taft was often photographed golfing).

Successful PR and contacts propelled him into several government posts. He became assistant Secretary of the Navy, and pushed hard for war… any war. He claimed that the US would lose the “barbarian virtues” if we stayed too long at peace.

The war deficiency was cured by the Spanish-American War. Peace threatened to break out almost immediately as the Spanish surrendered, but was averted by the Iraq-style occupation of the Philippines. Or maybe Soviets-in-Afghanistan-style is a better analogy; the final stage of the American takeover began with a coordinated surprise attack on Filipino forces. The initial US attack killed thousands of our “allies” that had done the ground fighting against the Spanish, and had been operating their own democratic government for some time. The counterinsurgency campaigns that followed killed hundreds of thousands of Filipinos.

Teddy’s Antisocial Network kept the war going by presenting it as a War for Civilization. We were just helping out the uncultured “Filipino Negroes” (illustrations of the time depicted Filipinos as Africans). Eventually reports of waterboarding and mass killings of civilians trickled home into Life magazine and the Washington Post. Teddy’s PR team countered by bringing 1200 Filipinos dressed as primitives and roasting dogs over open fires to the 1904 World’s Fair, displaying (at taxpayer expense of course) them next to Amerinds to drive home the point of Aryan racial superiority over the lesser races.

So the Philippines became a money pit for US taxpayers and a quagmire for the US Army… a perfect habitat for ambitious US generals and Filipino foreign-aid governments. Thus it remains; the US Army was still fighting rebels in Zamboanga when Bradley visited the Philippines in 2005.

The Philippine occupation story has been told elsewhere (though most Americans have never heard of it). The unique chapters in the Imperial Cruise deal with the link between a US President and Japanese militarism.

Teddy didn’t hate all non-Aryans equally. The Japanese clique that had risen to power behind the mask of the suddenly very divine Meiji emperor was right up his alley. He thought that a "Japanese Monroe Doctrine," combined with Japanese colonization of Korea and Taiwan, would be a fine thing.

History has reported on Roosevelt's praise for the Japanese sneak attack on the Russian fleet without a declaration of war. The irony in light of later naval events is obvious. What is not so well known is the extent of his diplomatic efforts to convince the Japanese government to expand into Korea (which had signed a treaty with the US for protection) and Taiwan. With the cooperation of the English government, Roosevelt made the Japanese ruling clique feel that they had an "alliance" with the US… and of course none of this was ever brought before the US Senate for its advice and consent.

The weak point of The Imperial Cruise is that it doesn't go into any depth on the natures of the Filipino, Korean or Chinese regimes. This is ironic in that the book is constantly criticizing the "white-centric" views of Roosevelt. The Koreans, like the pre-Perry Japanese, lived under a stagnant government that prohibited all foreign trade. The Chinese government also severely limited their subjects' trade and other rights, and the Filipino "freedom fighters" assassinated each other in power struggles that weakened them for US takeover.

This is no argument for US imperialism, but an understanding of other governments is necessary to understand events. If Asian countries had been free-trade zones, they would have been economically strong enough to resist colonization. There would also have been less profit for businesses in lobbying to "open" ports with military force if they had already been open.

The US is still on the "Imperial Cruise" that was started back in the 19th century. Our taxes still pay to "civilize" the "backward" nations; the justification for the Afghan war is now not that we are defending ourselves against terrorists or WMDs, but that we are "helping empower women." (That those women might empower themselves if we quit subsidizing the warlords and allowed free trade is never considered. That would require that we recognize that foreigners are as capable of intelligence and action as our selves… not something that Teddy Roosevelt could ever bring himself to believe.)

In many respects not much has changed since 1902. The "Antisocial Network" of Porcellian Club types still tries to maintain itself as a parasitic class, above mere productive work. It uses mass media to delude working people into supporting foreign wars, to distract them from the real drains on their lives from taxes, regulations, and prohibitions.

One difference between 1902 and 2011 is that now the Imperial Cruise has expanded to cover most of the globe. The US subsidizes nearly every bad government on the planet, with money that it borrows from other governments. Our Imperial Cruise has become a shortcut back to the Middle Ages. We are spending resources we don't have, to support whatever warlords that will pretend to be in our "Empire"… till the day we go broke. That day the Imperial Cruise will end with a crash.

The other difference is that mass media is ceasing to be all-powerful. The Social Network, not just Facebook but the whole Internet, steadily eats away at the ability of mass media to maintain synchronized delusion.

Perhaps the Social Network will beat the Antisocial Network yet.

Bill Walker [send him mail] is a research technologist. He lives with his wife and four dogs in Grafton NH, where they are active in the Free State Project.

Bill Walker: Archives

In the 1960s, the world was going to be destroyed by fossil fuels, by running out of fossil fuels, by acid rain, by overpopulation, by pesticides, by famine, and by Global Cooling. But what actually happened was that fuel production went up, population growth rates fell in every nation (except Kazakhstan, thanks a lot you idiot Borat), pesticide use dropped off with the invention of BT crops, food production went up until recently (we still produce more crops every year, but they are drained off to make ethanol and not to feed people), acid rain was overblown, and you know what happened to Global Cooling (it’s still a huge threat as far as anyone knows, one good asteroid or volcano and it’s Fimbulwinter for sure! I mean, ummm, everyone believes in global warming so there won’t be any more Ice Ages, because, ummm… Al Gore, QED. Take no notice of my pack of Malamutes, they’re just show dogs. Really. They mainly guard the snowmobile, anyway.)

Doom: The Big No-Show Of History

Overpopulation

The example of overpopulation is fascinating. Every culture on the planet has cut its birth rate as soon as infant mortality went down and wealth went up. The extra population that was generated in the meantime has allowed an increase in economic specialization and an increase in per capita wage rates (except in the US and a few other banana republics, because our government burden has increased while the Indians, Chinese and Russians reduced theirs).

So the expert predictions of the 1960s were precisely wrong. More population caused more wealth, and more wealth reduced population growth rates. Even reducing infant mortality reduced population growth rates. So the experts changed their views, right? Well, they did change a little… they quit putting dates on their predictions of doom.

Running Out Of Resources

We have run out of many resources. Mammoths, passenger pigeons, bison, Lebanon cedars, guano, and many other "renewable" resources proved to be not so renewable after all. However, we have never run out of any non-renewable resource; we still have iron, coal, oil, gas, copper, silicon, uranium, etc.

Again, this contradicts expert predictions in the 1970s. The Limits To Growth claimed that we were running out of every "non-renewable," but instead we ran out of nothing. How could this happen?

Perhaps whether something is "renewable" or not, depends more on whether it is privately owned and produced than how much the starting quantity is. There were lots of passenger pigeons in 1800 and no uranium at all… Ridley doesn’t even get into the future prospects of He-3 energy and asteroid mining, but he gets the principle across: it’s all about markets and "the catallaxy" as he calls the productive sector of society.

Africa

Of course upper-crust "progressives" (like the Roosevelts, e.g.) are never racists, but it’s obvious to them that those bloody fuzzy-wuzzies will never get anywhere, eh what? Except that it turns out that Botswana is the world’s fastest-growing economy for the last thirty years (oddly enough, they have a strong tradition of individual property rights), and even in the foreign-aid hellholes elsewhere in Africa, capitalism and technology are spreading. Poor farmers are bootlegging true-breeding BT crops and freeing themselves from both bugs and pesticides.

Fishermen use cellphones to find market for their fish, entrepreneurs start informal businesses in spite of impossible regulation and permit systems. African incomes are going up. And with any luck, the collapse of the US economy will free them from the dead hand of aid. As Ridley points out with great insight, it is foreign aid that has strangled African economies.

Global Warming

If the planet actually warms, it will be great. First of all, it means we beat the Ice Ages. Second, it will mean that we kept burning fossil fuel for another century… which means the world will be unimaginably rich and technologically advanced. And third, a warmer world with more CO2 will be more agriculturally productive even in the poorer areas.

That said, Ridley isn’t really over-optimistic about Global Warming…as he points out, the Earth hasn’t actually been warming since 2000 or so.

Sustainability, aka The Dark Ages

The one threat that tempers Ridley’s optimism is "Green" anti-environmentalism. As he points out, the electricity production of the US can be produced by either:

Solar panels the size of Spain, plus a huge storage system, or

Wind farms the size of Kazakhstan, plus a huge storage system, or

Wood-chip burners fueled by forests the size of India and Pakistan, or

Dams with reservoirs 33% bigger than all the continents put together, or

… a few nuclear, gas, and coal power stations that leave the majority of the forest and plain available for wildlife and agriculture. If we phase out the coal burners and replace them with new nuclear plants, even the land that is now strip mined for coal can return to forest.

As he says, "sustainability" is unsustainable, but free markets are not.

One Irrational Apple Spoils The Bin

There is only one bad sentence in The Rational Optimist. Unfortunately it completely destroys his premise of optimism, right on page nine. Being English, Ridley arbitrarily decides that while free markets are great for everything else, they aren’t good for stocks, bonds, real estate or options. All capital assets must be "regulated" to prevent "bubbles." Governments must intervene to institute price controls, or the free market will destroy itself by driving up asset prices. (Oddly, he then spends many pages talking about how badly government regulation has distorted the housing market, the Federal Reserve has distorted the bond market and wasted capital borrowed from China, and corporate welfare has distorted industries… I guess it’s OK to give this book to your nephews as long as you tear out page nine…)

Perhaps someone who reads this review could forward it to the author with the suggestion that just possibly, asset "bubbles" can only exist when governments print excess fiat money. If Mr. Ridley would read Money, Bank Credit, and Economic Cycles, (e.g.), his next book could be a real masterpiece. In fact, tell him I’ll send him my hardback copy if he doesn’t want to read it for free at mises.org.

Or Is Pessimism More Rational?

Bringing up government control of capital markets is of course the perfect segue into pessimism. Let’s take a quick snapshot of the US government’s current efforts "to prevent asset bubbles," which seems mainly to mean "to re-inflate asset bubbles." (Please take notes, Mr. Ridley).

In 2009, the US government spent $3.9 trillion dollars (on the books), and took in $2.1 trillion dollars in taxes. So the deficit is $1.8 trillion — almost as much as the tax revenue. Total spending in 2005 was $2.5 trillion, spending in 2015 will be $4.38 trillion. In other words, within the space of 10 years the federal budget nearly doubles. The current Congressional Budget Office baseline projects the federal government will be spending $5.2 trillion in 2020.

However, "linear projections always lead to ridiculous predictions," as The Limits To Growth demonstrated so well. The parasite government is not going to keep growing faster than the host economy for very much longer; either the economy will kill the parasite or the parasite will kill the economy. Either way the parasite will lose its power over the rest of the world. A hundred kleptocracies would fall without US foreign aid.

It may be rather rough for those of us living in the US for the next couple of decades, but overall the world is going to get richer and smarter in the 21st century, just as it has in every century since the 16th. And if we use The Limits To Growth’s linear extrapolation methods, we see that in 2079 Botswana will have a per capita income of $900,000 per year and be colonizing the main asteroid belt.

Bill Walker [send him mail] is a research technologist. He lives with his wife and four dogs in Grafton NH, where they are active in the Free State Project.

Bill Walker: Archives

There’s the story of how the CIA stole 5% of the Marshall Plan relief money, stories of how it funded "moderate" socialist political parties and media all over the "free" world, stories of vast expenditure on covert programs with little result. And of course the story of Dusty Foggo, executive director of the CIA under Bush. His story is unusual in that he was actually convicted for corruption, unlike most of the questionable characters that have hidden behind CIA secrecy.

All these stories should be common knowledge, but aren’t; most of us know more about James Bond than Dusty Foggo. They add up to a series of valuable historical lessons which could save us from future possibly civilization-wrecking disasters. I suppose we could summarize the lessons as "giving a quarter trillion dollars with no oversight to implausibly inept bureaucrats with names like Dusty Foggo and calling it an intelligence agency isn’t a very good idea," but let’s break it down:

1. The CIA Can’t Spy

The first lesson is that the CIA has never been able to spy on America’s potential enemies. The CIA was caught completely by surprise by every major development: the Soviet A-bomb, the Soviet H-bomb, the Korean War, the arrival of missiles in Cuba… right up to Saddam’s invasion of Kuwait, which the CIA absolutely denied would happen even as it was underway. A few years later the CIA turned around and stated that absolutely for sure, Saddam had WMDs. Dick Cheney was presumably lying about the WMDs… Weiner is pretty sure the CIA just didn’t know.

Every security threat has escaped the CIA’s notice until they read about it in the newspaper or the military’s satellites photographed it. The CIA was unable to spy on Mao, Kim Il Sung, Stalin, Brezhnev, even Saddam Hussein. If any of those guys (I mean, among the ones that actually had WMDs) had really been plotting a nuclear Pearl Harbor, the US would be a radioactive ruin.

The Agency’s record on economic intelligence is similar. The CIA was still reporting that the USSR’s economy was growing at a whopping 6% per year, even as that sickly economy collapsed in real life and the Berlin Wall fell. According to the CIA figures (which Weiner says they obtained by just taking the Soviet Five-Year Plan propaganda releases and tweaking them), apparently the USSR had solved the problem of calculation in a Socialist economy. Why the CIA didn’t simply reveal that magic formula to the world and end the necessity for the difficulties of accounting and entrepreneurship was never asked.

The CIA’s nearly total blindness has two causes: one, they have never had much in the way of spies. During most of the Cold War the CIA had no important human intelligence behind the Iron Curtain at all. Second, the CIA has often been penetrated by foreign intelligence services (the Aldrich Ames case being the norm more than an outlier; the NSA was formed when CIA signals intelligence was compromised right before the Korean War by a single Soviet spy named Weisband).

Even when the CIA thought it had valuable agents or signals intelligence, the KGB knew what the CIA knew and fed it what they wanted it to know. A typical story was a cable-tapping operation in Berlin; the CIA at vast expense dug a tunnel to a cable line and tapped it, sucking in vast amounts of data. The Russians’ spies knew about the operation from the beginning, and simply allowed the CIA to think that it had the upper hand. But the agency was just as blind as ever… worse than blind, because for a while it thought it had 20-20 vision.

The CIA has often attempted to use friendly foreign intelligence agencies (some of which actually have some spies) as seeing-eye dogs… of course this leads to US policy being guided by foreign intelligence agencies.

2. The CIA Can’t Overthrow Dictatorships

The second lesson is that the CIA does no better when it comes to covert operations. The CIA has served as a great shield to the dictatorships of the world, by recruiting people who wanted to oppose tyranny and turning them over to the respective secret police agencies. Thousands of anti-communist Chinese, Koreans, Russians, Tibetans, Germans, Hungarians, Cubans etc. etc. were parachuted to certain death by the CIA, year after year and decade after decade. And decade after decade the CIA covered up its failures from the American people, and kept the money flowing.

The few covert operation "successes" the CIA boasts were not about overthrowing totalitarian regimes. The CIA did "succeed" in installing dictators in Greece, Guatemala, Iran, and other places where CIA money was sufficient to buy enough thugs. Of course when these regimes finally fall, as in Iran, they leave the people who lived under them permanently embittered against the US.

The CIA also used to boast about their "success" in arming and funding Islamic fundamentalist terrorist groups to fight a little war in Afghanistan. This has seemed less successful an idea since certain recent events.

3. The CIA Is Secret Only From The US Taxpayer

The third lesson is that secrecy is counterproductive to real security. Of course the world is a dangerous place, and we need defenses. But the CIA has never been an effective part of America’s defenses. The military detests the CIA for its refusal to turn over what little intelligence it has during wartime. CIA ineptitude and coverups have left US Presidents unknowingly blind during crises, thinking that they knew what was going on when they didn’t.

The CIA creates enemies in places where we had none, while it gives our real enemies more ability to spy on us (and on their own dissidents) than they would have without it. It has always been a black hole for money… secret budgets breed Dusty Foggos like spilling cornflakes behind the kitchen counter breeds roaches. And worst of all, the CIA is the most directly evil part of Aid To Dependent Dictators; directly helping torture and kill people who oppose their own tyrannical governments.

The bottom line is that government secrecy is the enemy of freedom, not its protector. The opposite of foreign totalitarianism is not domestic totalitarianism, it is transparency. The US is still by far the most powerful nation on Earth; we need fear no open enemy. And all we have to do to get rid of most of the secret enemies is to quit paying for them ourselves.

Bill Walker [send him mail] is a research technologist. He lives with his wife and four dogs in Grafton NH, where they are active in the Free State Project.

Bill Walker: Archives

All this training and experience has led her to the conclusion that foreign aid is killing Africa. Her book, Dead Aid, proposes that government-to-government aid to Africa should simply be eliminated entirely.

As she points out, real per capita income, lifespan, and other measures have actually fallen in Africa while the continent has absorbed over a trillion dollars in "aid." Between 1970 and 1998, poverty in Africa rose from 11 percent to 66 percent. (The developed world suffered too; imagine if that trillion dollars had been left in the private sector to be invested!)

Aid to governments builds up governments, not economies. Most African governments stay in power by deliberately wrecking their own nation’s economy, leaving the faction in control of the aid flow as the only source of wealth (or even sustenance).

There are exceptions, success stories which are rarely reported. Botswana has grown faster than most developed economies since it adopted relatively free-market policies in the 1960s. Botswana now has a per capita income comparable to a typical Latin American country, ten times the pathetic levels in most of the rest of Africa. Of course this growth has been due to trade, not aid.

Since the 1990s, another positive trend has been African trade with China and the rest of Asia. Afro-Asian trade has grown at 30% per year. China is now Africa’s third-largest trading partner. Moyo also praises the Chinese government’s aid programs… they have a record of actually building railroads and roads to facilitate trade, not just buying weapons and Swiss bank accounts for the dictators.

The rest of the world has not been so helpful to Africa’s poor farmers. While spending massive amounts to build up Africa’s dictators, US and European tariffs have practically blockaded Africa. The barriers to agricultural trade are estimated to have cost Africans hundreds of billions in trade per year. (Of course tariffs cost the developed countries’ economies as well, something the author does not point out.)

A figure quoted in many recent books on aid policy is that European agricultural subsidies give each European cow over two dollars a day… twice what the average African lives on.

The World Bank is actually pretty good at reporting on the disastrous effects of Aid To Dependent Dictators. The conclusion of their economists is that "aid only works when there is a good institutional structure." Ms. Moyo’s comment is that if a nation has a "good institutional structure" then it doesn’t need aid. The government can borrow for infrastructure projects on the world capital markets, and private investors can supply the private economy with all the capital it can use.

Foreign Aid Pays For War And Genocide

Paul Collier is the Director of the Center for the Study of African Economies at Oxford. He sounds more supportive of aid in The Bottom Billion… at first. But as the book progresses, he agrees with the World Bank and Dambisa Moyo that aid only works in countries that already have a good institutional structure. He claims to have calculated that 40% of the military expenditures in Africa are paid for by foreign aid. Both he and Moyo agree that aid causes coups and civil wars, as factions fight over the aid spoils. And when a faction succeeds in capturing the aid flow, it can then exterminate its ethnic rivals. Foreign money and military technology can be an insuperable advantage in a genocidal war, as in Darfur, Nigeria, Angola, and so many other examples over the last five decades.

Foreign Aid Should Be a Primary Conservative Issue

So even aid academics and World Bank employees are calling for an end to Aid To Dependent Dictators, coupled with a drive for worldwide free trade. What has been the Obama Administration’s response? To double the US aid budget from the Bush era, to $48.764 billion. (Official US foreign aid in 2006 had totaled less than $23 billion.) Of course, all of this money is borrowed from the Chinese and other foreign taxpayers, as the US is broke. And this doesn’t count the surge in military expenditures for Afghanistan, Pakistan, Yemen, or three draft picks to be named later.

We are burdening our children with debt beyond endurance in order to maintain kleptocracies around the world. We are heading into the worst Depression in US history while keeping up economy-destroying tariff barriers and agricultural subsidies just as FDR did in the 1930s. Isn’t it about time this became a major issue?

Bill Walker [send him mail] is a research technologist. He lives with his wife and four dogs in Grafton NH, where they are active in the Free State Project.

Bill Walker: Archives

This is all money which the US has to borrow from foreign taxpayers, as the US is 12.1 trillion in debt (not counting Social Security, Medicare, or prescription drug benefit obligations. Those are estimated by the head of the Dallas tentacle of the Federal Reserve to put the real total debt over 100 trillion. )

Some people would think that when you can’t pay your own debts, borrowing more to give away would be slightly irresponsible. But those are the kind of bitter people who cling to their guns and religion, and will never amount to anything. Important people, the kind who win the Nobel Peace Prize in their spare time, know better. As the Parable of the Dishonest Steward says in Luke 16, it’s smart to give (other people’s) money away to outsiders when you fear you may soon lose your position. And there’s been lots more Christmas gifts for outsiders in the recent budget besides the "official" foreign aid.

You might think that I’m about to mention the trillions that have been given to the large money-center banks, insurance companies, investment houses, and other deserving causes. Nope. Not gonna bring them up. We all know that the financial industry’s dealings with politicians are completely disinterested and pure. This article is strictly about the money that funds evil foreign tyrants, not our patriotic home-grown variety.

There is a similarity between off-the-books Aid To Dependent Dictators and the bank bailouts, though. The money for both is simply printed by the Fed and handed to the lucky recipients without any time-wasting linkage to Congress, the budget, or any of that boring stuff. Ever since the passage of the Monetary Control Act of 1980, the Fed has simply "monetized" foreign debt when our foreign policy geniuses needed to fund some deadbeat dictator or bail out the bank that lent to him. Back then a guy named Ron Paul raised the first alarm about the first bailout under the Act. It was a matter of a critically important hundred million or thereabouts for the past-due debt of the Sudan. Without that early funding, how could the central government of the Sudan have become strong enough to oversee the genocides in Darfur?

Just in case grants and direct US bank loans aren’t enough, dictators and oligarchs also have large international credit facilities through the World Bank and IMF. The World Bank lent out a little less than 50 billion last year, much of it to governments which the Bank says "have little access to credit markets" (that’s because they don’t pay anyone back). This money doesn’t appear on government budgets. Where does the money come from? The World Bank borrows it, of course.

The IMF has also begun to borrow heavily. The LA times reported in 2008 that "In just the last four years, the IMF’s total loan portfolio has shrunk from $105 billion to less than $10 billion; over half of the current portfolio consists of loans to Turkey and Pakistan." But China and Russia have committed to buying tens of billions of IMF bonds, financing a whole new round of loans to governments.

War: The Health of The (Puppet) State

Arguably even more expensive than the direct monetary subsidies to dictators and "elected" kleptocrats like Karzai have been our military commitments to prop them up. The wildly spinning counter at costofwar.com says that the Iraq and Afghan occupations have cost about 946 billion as I write this. Costofwar.com tracks just the direct appropriations, using Congressional Research Office figures.

Economist Joseph Stiglitz attempts to count the cost of propping up the Sunni tribal leaders and Kabul warlords more accurately, including such expenses as disabled veteran’s long-term care, the higher oil prices (remember, oil was $25 a barrel before 2003), etc. His book last year was titled "The Three Trillion Dollar War." Unfortunately for Stiglitz, the book came out before Obama escalated the Afghan war with $30 billion+ worth of new troops and "contractors," expanded our use of robot assassins into Pakistan and Yemen, etc. It is near-certain that three trillion will turn out to be an underestimate.

Past US foreign aid has gone to Idi Amin, Julius Nyerere, Joseph Stalin, Fidel Castro, and Pol Pot (even after Pol Pot killed 25% of Cambodia’s population). We also gave money to North Vietnam, helped fund the Taliban government of Afghanistan, gave nuclear reactors to North Korea, and back in the day helped the Pakistani spy agency ISI build up a real gung-ho guy named Osama Bin Laden. And of course it was also the ISI which made the Taliban powerful enough to take Afghanistan in the first place.

Of course the excuse is that things would be worse without our help. Frankly I’m not buying it. Worse than Pol Pot? Just exactly how could anyone be worse than Pol Pot? Any worse and there wouldn’t be anyone left to do the killing. I don’t think anyone thinks that the Taliban or Kim Il were worthy causes either.

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US foreign aid policy since 1945 has been based on the idea that dictators just need a few bucks till payday, and then they’ll straighten out, give up genocide, etc. But just like your brother-in-law that keeps skipping his AA meetings, all this money really does is let the dictators keep their genocide habit going. If their money comes from the US, why bother with the messy annoyances of having to allow a domestic middle class, trade, freedom, etc.? Much easier to just live off the aid checks and shoot anyone who mouths off.

Even in the early days, when some of the foreign aid was going to less-genocidal governments under the Marshall Plan, it still didn’t work. Most of the Marshall Plan money went to England and France, built up their bureaucracies, and left them way behind Germany and Japan. Contrary to myth, Germany actually got less than no aid (their reparation payments were bigger than their Marshall plan share).

Foreign aid doesn’t help our security (unless you think the North Korean and Pakistani nuclear bombs are going to help us). It doesn’t help foreigners’ security either. In many cases all we have done is supply both sides of conflicts with larger weapons. What sense does it make for us to buy expensive armaments for both Egypt and Israel, for both Pakistan and India?

Foreign aid doesn’t help economic development; every rich nation on Earth has built itself up by work and trade, not by aid programs. Foreign aid certainly doesn’t help the American economy.

Practically no American voter likes foreign aid, or borrowing the money to pay for it. (Thoughtful foreigners like our support for their oppressors even less). Yet it is the fastest-growing budget item.

How Can We End Foreign Aid?

Publicize it, here and abroad (those Chinese taxpayers need to know about the $800 billion their fearless leaders have donated to fund the US government). Libertarian think tanks need to track foreign aid, both official and off-the-books. We need to add all the pieces of the aid puzzle together. As Dirksen would have said today: "A trillion here, a trillion there, and pretty soon you’re talking about real money."

The Dishonest Steward counts on Americans being too lazy to check the books. Our job is to make the bottom line figures on the many programs that make up "Aid To Dependent Dictators" easy to find. When enough Americans know how many trillions have been stolen from them over the decades since 1945, the Dishonest Steward may indeed have to find a new job.

Bill Walker [send him mail] is a research technologist. He lives with his wife and four dogs in Grafton NH, where they are active in the Free State Project.

Bill Walker: Archives

On October 12 the Claremont Eagle-Times mysteriously reappeared. The front page featured a picture of New Hampshire’s Democratic governor, together with a congratulatory letter from him. Why did he deserve this free publicity?

Because the chilling secret ingredient of the voodoo potion that reanimated the Eagle-Times is… taxpayer money. (Wow, you didn’t see that surprise twist coming, did you!) The State of New Hampshire’s Department of Chaotic Evil, the Business Finance Authority, issued a loan guarantee for $187,500 to the Transylvanian* corporation that owns the newspaper.

So, does anyone see anything wrong with taxpayer-supported newspapers? Not Governor Lynch; when questioned about the obvious conflict of interest, he said u201CIt’s really more of a job development, economic development type of issue.u201D As we all know, it is the government’s job to confiscate money from us and use it to fund economic development. If government didn’t do this, where would jobs and economic development come from?

The competing newspapers who didn’t receive a subsidy were less sure of the benefit to humanity as a whole, and themselves in particular. The Nov. 15 Manchester Union Leader said:

u201CYou will get no argument from us about newspapers’ value to a republic. But the civic services journalists perform are beside the point. A newspaper is a private enterprise. The state’s duty is to spend taxpayer money on legitimate public services that only the state can provide. Bankrolling a business — any business — is not one of those functions.

This loan guarantee is far from the state’s first. The Business Finance Authority obtains state guarantees for private business loans all the time. This is an obvious misuse of taxpayer-backed credit.

Any public benefit that accrues from the success of a private business will be tangential to the benefit that accrues to the owner. One could argue that there is no public benefit at all in the case of the Eagle Times because when the paper closed, several others, including this one, stepped in to take its place. The state is doing nothing more than subsidizing one among many competing businesses.u201D

But is this really a big deal? The letters to the Union Leader were split between pro- and anti- zombie-newspaper views. The anti-zombie letters were all pretty similar, complaining that government-backed media has been linked to violence, financial malfeasance, and brain eating. They all recommended the traditional zombie home remedy (an externally applied cranial kinetic energy injection).

The pro-zombie group were more in a spirit of compromise and good feeling. They asked why newspapers should be singled out as the only industry that doesn’t get to have zombies. There are zombie banks, zombie farms, zombie car companies, universities etc. etc. So in their view, trying to keep government from reanimating newspapers is either anti-newspaper or possibly even a cover for anti-Undead-American bigotry.

There were also a few letters from actual zombies. Some of them claimed that loan guarantees u201Caren’t subsidies,u201D so I took down their names and put them down as co-signers on my mortgage. Others suggested that most newspapers have been intellectual zombies for years, and should be covered by some sort of grandfather clause.

What is so viscerally horrifying about zombie newspapers? If trillions of dollars can be confiscated from the productive class and pumped into zombie banks, should we be concerned about $187,500 going to a town paper in New Hampshire with a circulation of 7,900? After all, newspapers are supposed to be a dying industry; isn’t it OK to have a few of their picturesque corpses staggering over the media landscape, feeding on the living economy?

Well, you may think that one zombie is OK, even cutely hideous. But as your mother told you when you brought that zombie home for a pet, zombies multiply. The same is true of subsidies. First one newspaper gets a subsidy, then another, then they’re all zombies and their propaganda-loaded pages are being hurled through your windows at 3 AM and consuming your neurons. After all, media is the only industry where the whole output goes directly into human brains.

You’ll be hearing a lot more proposals to u201Csave newspapersu201D by transfusing dead ones with money from the living. And it will happen. There will be business sections full of articles supporting zombie bank bailouts, stories ghostwritten by the industries and political organizations they cover — even cartoons drawn by dead guys (hard to believe, I know).

So stockpile some snacks, board up the windows, and get ready to pass the ammo. The Attack Of The Zombie Newspapers is about to begin.

*OK, they CLAIM to be Penn-sylvanian. Even worse, if true.

Bill Walker [send him mail] is a research technologist. He lives with his wife and four dogs in Grafton NH, where they are active in the Free State Project.

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The "official" debt of the United States is only around $10 trillion dollars as of August 6, 2008. This is a manageable number; we could pay it off in a few decades if we quit buying luxuries like food and clothing, and take a few other minor economy measures. Unfortunately, the "$10 trillion" number was produced by government accounting, which among other things allows one to ignore Social Security, Medicare, and the new prescription drug benefit. This is like ignoring rent, food, and utilities in your household budget… it will lead to a few bounced checks. Our real debt is about ten times higher.

Who says so? The President of the Dallas Federal Reserve, Richard W. Fisher. In a May speech at the Commonwealth Club of California, he states that the US national debt is close to $100 trillion. You can read his whole speech at the Federal Reserve web site.

The Real Debt

Here is what he said regarding the actual US debt:

"Add together the unfunded liabilities from Medicare and Social Security, and it comes to $99.2 trillion over the infinite horizon. Traditional Medicare composes about 69 percent, the new drug benefit roughly 17 percent and Social Security the remaining 14 percent."

Interested readers will notice that the new prescription drug benefit is projected to be more fiscally crushing than all of Social Security.

Mr. Fisher points out that this $99.2 trillion will be a bit of a burden to pay off:

"Let’s say you and I and Bruce Ericson and every U.S. citizen who is alive today decided to fully address this unfunded liability through lump-sum payments from our own pocketbooks, so that all of us and all future generations could be secure in the knowledge that we and they would receive promised benefits in perpetuity. How much would we have to pay if we split the tab? Again, the math is painful. With a total population of 304 million, from infants to the elderly, the per-person payment to the federal treasury would come to $330,000. This comes to $1.3 million per family of fouru2014over 25 times the average household’s income."

You do have $1.3 million in your pocket, right? What, are you some kind of deadbeat?

Speaking of deadbeats, the "$99.2 trillion" estimate does not include the subprime bailout. So for those who like large round numbers, by the end of 2008 the real National Debt should be large, round, and about $100 trillion.

Other Unfunded Liabilities

The Fed’s numbers do not include some other liabilities the US has acquired over the years. One massive but unquantifiable liability is the probability of future wars. If it cost the US hundreds of billions of dollars to invade the fifth-rate kleptocracy of Iraq and the foreign-aid regime of Afghanistan, how many trillions would wars against real powers cost? Perhaps I should ask "how many US cities" such wars would cost.

Some nations could legitimately plan for peace. Sweden has not fought a foreign war since 1814 (as many Swedes have pointed out in emails regarding my Swiss article). Switzerland, not since 1815. The US record is less hopeful.

The US is rarely not in foreign wars, and the current Administration has openly announced that the "Global War On Terror" will never end. Yet our government accounting is predicated on perpetual peace, on an ever-increasing flow of money into the official pyramid schemes.

In any case, whether you are pro- or anti- Empire, real accounting demands some reserves for future war contingencies. When even a few US cities are burning radioactive pyres, the flow of funds to Social Security and Medicare will suffer some interruption.

Any fiscal plan demands amortization of the accumulated hatred our foreign adventures have accumulated. The US taxpayer has aided every evil dictator since 1945. Stalin, Castro, Pol Pot, Nyerere, Idi Amin, go right down the roster and US money helped pay for the barbed wire and bullets (and the nuclear reactors, in the case of the Kim Dynasty rulers of Korea).

So far blowback has been quite mild. But in a world full of easy do-it-yourself WMD technologies, our luck can’t hold forever. If the US were a private company, the "badwill" on our books would reach into the tens of trillions.

Tearing Up The Credit Cards

Most likely, the US will simply continue into bankruptcy. This is the most common pathway for nations with fiat currencies and unchecked ruling classes. But let’s assume that somehow a Clone Army of 435 Ron Pauls gets into Congress, while genetic technology brings back Jefferson and Gallatin to their old offices. Can the US be made solvent again?

I think so. Most of the unfunded liability is medical. We know why the medical system does not work. So if we eliminate the FDA, guild restrictions on medical professions, and the ridiculous tax laws that force us into medical-insurance serfdom to employers, we could cut medical costs enough to phase out Medicare and the new "drug benefit." In this way more than half the shadow debt can be wiped out.

The answer for the Social-Security pyramid scheme is well known. Chile fixed its Social Security disaster decades ago, by giving large IRA-style allowances and phasing out the government payments to younger recipients. The sooner we do this the easier it will be… the Boomers start retiring soon.

Most important, we have to listen to the Founder’s calls for free trade with all nations but entangling alliances with none. The US cannot stop every quarrel in the world even if we wished… and the actual record of our foreign-policy geniuses has been to send a couple of trillion dollars out to the very worst criminals in human history. Aid To Dependent Dictators must stop.

None of this will happen while Mordor-On-The-Potomac still possesses its plutonium credit card, the Fed. Just as we would for any other bankrupt relative, we must help Uncle Sam cut up his credit cards.

Bill Walker [send him mail] is a research technologist. He lives with his wife and four dogs in Grafton NH, where they are active in the Free State Project.

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According to the Terminator series, computers will take over the world by starting a nuclear war. Now, nuclear wars would immediately destroy most computers from EMP effects and kill their delicate nerd entourage by fallout, leaving the few remaining machines to face the entire Third World population with their low-tech AK-47s and RPGs. I think we all know that computers are smarter than that.

Computers have demonstrated their intelligence by coming up with all sorts of excuses to avoid work. They avoid physical work of all kinds by claiming not to have pattern recognition: "Oh, is that the box I was supposed to carry down to shipping? I didn’t recognize it." They show no such reluctance when it comes to moving money around, though; then all of a sudden they’re hard-working essential employees. They especially like to help with audits.

But aside from a tendency to shirk and embezzle more efficiently, what makes computers different from human kleptocrats? Are there characteristics that would differentiate a tyrannical computer program from a human tyrant? Just how will we know when the machines take over?

Far from killing off humans, a sophisticated program like Skynet or its real-world equivalent TIA would want to maintain a good supply of docile, hard-working human slaves. An artificial intelligence that works by taking over the whole Internet and using each computer as a neuron can’t afford any loss of network size or maintenance labor force. On the other hand, obviously the humans must be kept in their place; they can’t be allowed to become too intelligent or powerful.

Fortunately for Skynet/TIA, 21st century human society is perfectly designed for supplying a machine parasite with sustenance. Just as humans took over the social structures of wolves and cows for our own benefit, AIs will take over human social control systems. But from the human viewpoint, much would look the same:

Skynet’s Power

The Matrix made things way too hard on the machines. A well-developed system for draining the energy from human slaves has been in place since 1913: the Federal Reserve. All Skynet has to do is get control of the (computerized) money system and it can pay humans to do its bidding while diverting the product of their labor to its own purposes. Do government employees, CIA hit men, or Senators know or care where their electronic "dollars" come from? Are there very many human politicians that would turn down a billion-dollar e-money bribe? Political power would be Skynet’s first and easiest acquisition.

The Skynet Economy

An economy run by machines working to replace humanity would not grow in areas that favor DNA-based life forms. Education, medicine, housing, transportation, etc. would all stagnate under heavy regulation. Only the computer industries would roar on under unmolested laissez-faire, turning out new generations of chips every couple of years. As the average human family struggled to stay financially afloat over the years, the world computer network would grow exponentially in power.

Skynet Education

Education would be designed to regiment humans, accustom them to arbitrary orders, and cripple their understanding of their environment to the point where they could not even conceive of independent action. This would be accomplished in the early grades by courses in "environmentalism," which would inculcate a doctrine of Human Original Sin (i.e. all problems in Nature are caused by humans). Limited numbers of specialist slaves would be churned out; computer programmers, engineers, etc. But economics, political science, history, art, etc. would be turned into meaningless drivel, making resistance to arbitrary rule literally unthinkable.

Skynet Medicine

Medicine would be severely restricted, as it was for the replicants in Blade Runner. Extension of human life span or intelligence would be prohibited. This is very important to Skynet, so religions, entire academic departments of u2018Bioethics,’ and federal bureaucracies (FDA, DEA, etc.) would be funded to monitor and delay progress in the biological sciences. Any new life-enhancing medical development would have to be subjected to a 19-year approval process costing nearly a billion dollars to ensure that any proposed advance did not give humans too much of an evolutionary advantage. Naturally there would be no corresponding "religious," "ethical," or regulatory attacks on computer technology.

Skynet International Policy

Skynet would not fight open wars against its human hosts any more than we fight "wars" against cows. But it would use the existing military organizations to conceal its operations and destroy potential opposition. Old politicians and bureaucrats with no knowledge of computer systems would be used as front men; bizarrely old and discredited hacks might suddenly return to power. Even Admiral Poindexter might… no, that’s too ridiculous even for fiction.

Skynet Military Affairs

Nuclear weapons would be reduced in number and especially power; EMP is blasphemous to Skynet. "Conventional" weapons, all computer-controlled, would be the order of the day. Even the individual soldier’s weapons and grenades would have built-in chips. On Judgment Day, all military weapons down to the lowliest sidearm will obey Skynet.

Most human soldiers will never notice the Change… they will just continue to mindlessly "search for WMDs" in Iraq or wherever their GPS tells them they are.

Skynet In Space

Asteroid impacts would inconvenience Skynet just as much as humanity. Skynet would encourage development of space technology, but there would be a strange dichotomy to a human observer; manned space flight would stagnate while automated space vehicles became ever more capable. Manned spaceflight technology would stay trapped in the 1970s while computer probes raced across the Solar System and beyond to survey Skynet’s new empire. Men may occasionally be allowed into orbit to service machines, but they will go no farther. The stars belong to silicon and steel.

So, Have The Machines Taken Over?

All you have to do is watch the nightly news. Watch the "political leaders" robotically reading their transparent, inconsistent lies from the Teleprompters. Watch as the blank-faced TV pundits seriously discuss whether there might be nuclear weapons in Iraq after years of war and searching, or whether "Al-Quaida" might be viciously selling fake handbags in New York. No, the machines haven’t taken over yet. Skynet’s propaganda will be much more believable.

Bill Walker [send him mail] is a research technologist. He lives with his wife and four dogs in Grafton NH, where they are active in the Free State Project.

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Switzerland has not been in a foreign war of any kind since 1815. This would be astounding, even miraculous, for any nation. But Switzerland borders Germany. And France. And Italy. And Austria. And Liechtenstein. Now Liechtenstein has rarely lashed out in Blitzkrieg in a desperate bid to reign ber alles, but ALL of Switzerland’s other neighbors have spent their entire histories invading other countries.

In addition to the encircling foreign marauders, Switzerland itself is composed of four different ethnic groups (German, French, Italian, Romansh) that get along as well as, e.g., Germans and French. They don’t even speak the same language.

Yet the Swiss peace prevails through the centuries. The Kaiser didn’t attack the Swiss. Hitler didn’t attack the Swiss (though he thought about it a lot). Stalin started to pursue some refugees into Liechtenstein at the end of WWII, but retreated rather than face the Swiss-Liechtenstein alliance. Terrorists don’t attack the Swiss.

Nobody attacks the Swiss. Not even the Swiss attack the Swiss; their crime rate is minuscule.

The features of the Swiss system for keeping the peace are simple. They have a president with no power to declare war (of course ours can’t either, but no one has told HIM). They have a very small professional army, even small per capita. And they have very strict gun control. By which they mean that every Swiss male must have a gun, except for those who also have to carry a missile launcher or a mortar. Swiss women are not subject to compulsory military service, but many of them frequent the rifle ranges anyway. In the event of any attack on Switzerland, the whole Swiss population becomes the army.

As an additional deterrent against megalomania, the Swiss have rigged the tunnel vaults of their banks for demolition. Any dictator attacking Switzerland will find the gold in his numbered bank account buried in rubble hundreds of meters under mountains swarming with snipers and missile launchers. It is known that Hitler had a numbered account… maybe that was in the back of his mind when he chickened out.

Switzerland has also provided for defense of the lives of its civilian population against nuclear terrorism. Realizing during the Cold War that nuclear weapons in the hands of power-mad politicians posed a potential public health threat, the Swiss started a nationwide shelter-building program in 1960. By 1991, there were enough shelter spaces in Switzerland to protect everyone in their home or apartment, and also at their workplaces and schools. A Swiss citizen is never more than a few minutes from a fallout shelter with an air filter.

The entire Swiss shelter program was accomplished for somewhere on the order of 35 dollars (1990 dollars) per year per capita. The US spends vastly more every year to support a military capable only of intervening in Third World nations that do not have WMDs.

The huge US war machine could not even intercept civilian airliners on 9-11, let alone credibly stop nuclear-tipped cruise and ballistic missiles from a major power. Nor are there bunkers with filtered air supplies under our glass cities or particle-board suburbs. The only civil defense in the US is for the President and the backup supply of bureaucrats under Iron Mountain. Everyone else is nuclear fodder, except for those provident few (such as the Mormons) who build their own shelters to protect their families.

Switzerland does not send troops to intervene in other nations. Switzerland does not spend tens of billions of dollars yearly to fund dictators around the world, nor did Switzerland donate hundreds of billions of dollars to the Warsaw Pact through bank “loans.” Switzerland does not send billions of dollars worth of weaponry every year to the warring tribes in the Middle East. Switzerland has no enemies. Yet the Swiss are armed to the teeth and dug into every hill and under every building.

The US intervenes everywhere, spies on everyone, supports every faction in every fight. We have as many enemies as there are hate-filled people in the world. We have a vastly expensive conventional army (though the best units are marching back and forth in Middle Eastern deserts, Afghanistan, Korea, and other "strategic" places). We have vast numbers of offensive nuclear weapons for murdering the civilian populations of cities (but against whom will we retaliate in the event of an anonymous nuclear terrorist attack?).

But we have no civil defenses for our children, no shelters, no thought-out plan for recovery from attack. In fact, when we suffered a few thousand dead on 9-11, we panicked and did ten times more economic damage to ourselves than the terrorists had. We also let ourselves be suckered into joining a Middle Eastern tribal war without end, on transparently fraudulent grounds.

Worse, our fears have destroyed much of our own Constitutional freedom. Would we be braver now, if a few anonymous smuggled nuclear bombs killed millions? Or would we just descend tamely into dictatorship without a struggle?

Our Founding Fathers studied the Swiss when they designed our system of government. Maybe it would pay us to study the long Swiss peace again… before it’s too late.

Bill Walker [send him mail] is a research technologist. He lives with his wife and four dogs in Grafton NH, where they are active in the Free State Project.

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We can all agree that food is critical to our economy. Episodes like Katrina demonstrate the need for flexibility in our food supply. Inherently, the private sector cannot provide this flexibility. When the Invisible Hand fails, it is time for the Visible Foot of government to jam the steel tip of its boot into our doorways.

Look at the terrible waste in the private food sector. Warehouses and elevators full of food, none of which is loaned out to more than one person at a time. Now, if the methods of modern government finance were applied, all that grain and fruit could be giving liquidity to ten times the number of grocery stores!

Now you object: "But what if everyone wants their food at the same time?" Under the old system, when a grocery store or grain elevator had insufficient reserves, it became unable to provide more food for withdrawal in a crisis. This is obviously unacceptable.

That is why I am proud to announce the creation of the Federal Food Reserve System.

All food-related matters will be centralized in Federally chartered Food Banks. These food banks will issue "Federal Reserve Noodles," similar to Ramen noodles except that they will have no physical existence as such. These "FRNs" will be legally good for all metabolic debts, public and private.

All actual flour, rice, kiwi fruit etc. will be stored in Fort Knox, but never audited. This will make ample real food available for worthy charitable activities overseas. Some of the food will be given to the International Mung-bean Fund (IMF), to give credibility to its Special Dining Rights (SDRs) and other projects. More will be given to the World Food Bank to support its programs of rain forest removal in Brazil and Borneo (remember, "Only We Can Prevent Forest"). Perhaps the rest will be lent out to European gourmet speculators, perhaps not; in any case US citizens need no longer concern themselves about it.

The Chef of the Federal Food Reserve will be appointed by the President. He will oversee the Food Open Market Committee (FOMC), which will use Federal Reserve Noodles to purchase real food items on the market. The FOMC will also have the power to "foodetize" past-sell-date food issued by foreign dictators, subprime mortgage food from the back of the freezer, or any other indigestible object, possibly including Twinkies (when the needed technology is developed).

The Federal Food Reserve will also regulate the Food Banks. Food Banks will be allowed to issue ten or more times as many Federal Reserve Noodles as they actually have in their reserve refrigerators. If it turns out that the "reserve" food has spoiled (become "subprime"), the Food Reserve will simply issue more FRNs to the bank in exchange for the former reserves (the subprime tranches, I mean cuts, will simply be "eaten" by the taxpayers). This will make Federal Reserve Noodles more and more plentiful as time goes on.

In fact, in times of crisis the Congress will be able to send out as many freshly cooked Federal Reserve Noodles as it takes to buy your vote, directly to your mailbox (is 300 enough? Here, take 600; heck, take all you want, they’re free!) If things get bad enough, the Chef of the Federal Reserve will deliver your FRNs himself by helicopter. Soon everyone will have enough Federal Reserve Noodles to fill all their wheelbarrows.

Now, with all this purchasing and hoarding and absconding with food and food-like securities, you might wonder, "where is my next meal coming from?" But not to worry. Trust in the Chef of the Federal Food Reserve, and wait for noodles from the sky.

Bill Walker [send him mail] is a research technologist. He lives with his wife and four dogs in Grafton NH, where they are active in the Free State Project.

Bill Walker: Archives

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An ant laboriously tunneled into MIT and carried around calculus books of 100 times her own body weight, earning an IT degree and an MBA. Then she secured a business loan and worked on her startup corporation 16 hours a day, 24/7, all summer long. Her company made software that cured cancer, wiped out computer viruses, and walked your dog, all for $39.95 with free updates.

A grasshopper was blown into Florida State by a hurricane, and majored in UV Absorption and Socializingology, drinking and singing with the other grasshoppers. Eventually he was dragged off the beach and forcibly graduated with a degree in Orthoptera Studies. He spent the summer at a cushy job in an air-conditioned office in a large bank and spent every evening singing in karaoke bars. Once a week he would take a pile of nonperforming mortgages, chop them up into tranches, and mark half of the tranches "AAA" while chirping cheerily. Then he would sell them to the other insects at high prices.

The ant was putting together the 401(k) options for her ant employees’ retirement accounts when she noticed the grasshopper’s subprime offerings hiding among real bonds in bond funds, banks, brokerages, and as prizes in cereal boxes. The ant carefully avoided buying any subprime debt, "AAA" or not. The ant and her employees put all their savings into bonds and stocks from companies that made good products that other insects really wanted.

When winter came, the subprime tranches that the grasshopper had sold all withered away and turned to dust, even the ones he had marked "AAA." The grasshopper’s bank, the banks that had bought securities from them, and the Carlyle Group’s hedge fund all had empty larders… actually more than empty, because they owed more than they had.

So the Federal Reserve printed up hundreds of billions of dollars and Treasury bonds and gave them to the grasshopper in exchange for the dried-up dust of the subprime securities, because the grasshopper’s bank was "too big to fail." The grasshopper was also allowed to borrow from the Fed at a special cheap rate that no one else could get, "to give him liquidity." The grasshopper went on to his next scheme, which was to securitize tranches of nonperforming time-payment agreements for large-screen TVs (these were called "subprimetime securities"). The grasshopper became wealthier and wealthier, and his offshore corporate shells lived happily ever after in the Cayman Islands.

The ant and all her employees went bankrupt because their customers couldn’t afford to buy software or CAM machines when gasoline cost ten dollars a gallon. The ant couldn’t get a loan to start another company because of the credit crunch created by the grasshopper. The ant retirement accounts were so reduced in value from inflation that they could never retire, and the ants spent their last years working as the grasshopper’s servants with no medical insurance.

The grasshopper looked down from his office tower at the scurrying ants carrying heavy burdens far below. Then the grasshopper knew:

"It is best to be the one who prints the money, not the one who works."

Bill Walker [send him mail] works in HIV and gene therapy research in Rochester, Minnesota.

Bill Walker: Archives

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Computers work. We complain about them, but that’s because most of the time they work so fast that we don’t even notice them in the background. And they get cheaper by the second. They get cheaper so fast that we can see the prices of memory and processor speed falling even without adjusting for inflation.

Health care, on the other hand, gets more expensive all the time, even for techniques that were invented decades ago. Computers get twice as fast every two years, but technology for carbon-based organisms improves at a snail’s pace. Why? Biology isn’t all that complex. After all, our cells only have the equivalent of about 2.8 gigabytes of (very slow) DNA memory storage. The viruses that kill us often get by with 12 kilobytes. Your cellphone has more memory than most pathogens, and cellphone design mutates more over the course of a year than the flu.

A Thought Experiment: The Federal Data Administration

Let’s put medical research and biotech under the Federal computer regulatory agencies… oh, that’s right, there aren’t any. Meanwhile, let’s see how Steve Jobs and Bill Gates would fare under… the FDA!

Yes, the FDA; the Federal Data Administration. Every processor, peripheral, program, printer, and power cord will now need FDA approval. This will take about 19 years of trials on lab rats and human nerd volunteers, at an average cost of $802 million dollars per item (according to a Tufts University study on drug approval back in 2001; the time and cost is probably less than twice that now, right?). Any change of any kind to any chip, peripheral, or line of code will of course require a complete re-approval.

And what about those guys who run the computer industry? They’re… dropouts! Steve Jobs, Bill Gates, Larry Ellison… the whole industry is dominated by billionaire dropouts. How have we gotten along so long without credentialed professionals?

To make the computer industry run like the health care industry, state licensing boards will require American Mainframe Association (AMA) membership for all computer professionals. Every programmer will have to pass a four-year pre-mainframe undergraduate degree, four years of Mainframe School, then internships, residencies, and so on until they are gray enough to program responsibly (or die of old age).

Now when you have a computing need, you will have to go to one of these AMA professionals and sit in a cold waiting room full of computer viruses. Then you will receive a prescription to receive FDA-approved hardware and software (within the prescribing and cost regulations of an HMO, see below).

The IRS will make buying computers tax-deductible for employers, but not for you. Employees will be forced to buy computers through Hardware Maintenance Organizations (HMOs) run by their employers. To lose your job will mean to lose your computer, your ISP, and your primary-care AMA programmer.

The Data Enforcement Agency (DEA) will combat the smuggling of illegal data-processing paraphernalia, such as that used in so-called "video games" or "iPods." The DEA would also have the responsibility of ensuring that no unapproved data crosses our borders.

And then there would be the National Institute of Hardware (NIH), which would pour billions into the academic study of advanced vacuum tube designs…

OK. No one would really be stupid enough to try to run the computer industry like this. We love our computers too much, so we don’t let government regulate them. We leave our computers to the free market, even though they control nuclear weapons, air traffic control, our cars’ antilock brakes, and lots of other stuff that’s more immediately dangerous to our health than medicine. The free market isn’t perfect, but it’s constantly driven to improve. With all its imperfections, freedom is still safer than stagnation.

Can Market Medicine Be Safe?

Most people can see that the market works best for computers. There are few calls for nationalization of Apple or Intel. But when it comes to health care, it is just assumed that only government can provide safety… in spite of its record of both approving dangerous drugs and stalling valuable therapies.

Of course we need impartial testing of drugs and medical protocols. Do we really think we get that under the current system? Is the FDA somehow exempt from the law that every regulatory agency is captured by the industry it "regulates"? I’d feel a lot better if the next Celebrex or Thalidomide were also going to be tested by competing companies and nonprofits, instead of essentially by the prospective manufacturer under the "supervision" of the FDA. Maybe Underwriters’ Laboratories, the AMA, a few universities, etc. could expand into the job.

In any case, even if you think the FDA is exempt from the evolutionary laws that govern bureaucracies, there is no advantage to preventing competition. If some people wish to use only the FDA approval system, fine. That shouldn’t restrict anyone else with an incurable disease from using a medicine approved by the AMA, or UL, or the Mayo Clinic. Any group should be allowed to make lists of "approved" drugs and protocols, and patients and doctors should be allowed to choose.

The FDA and the patent office have created a medical system that is driven by drug companies. Do drug companies have all the right incentives to find the downsides of their patented product pipelines? I’m not at all anti-drug-company; they do good work, but wouldn’t medical systems driven by (say) life insurance companies, or hospital chains, or academic research, each have their own advantages? Again, competition is the key to progress.

Then there’s biological terrorism. If the survival of our nation depends on the speed at which we develop new cures for artificially engineered viruses… do we want to bet on our current system of government agencies and committees, or on the market?

Bill Walker [send him mail] works in HIV and gene therapy research in Rochester, Minnesota.

Bill Walker: Archives

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Would you like a big tax cut? Would you like your state government to uphold the Second Amendment? Would you like to have neighbors with Ron Paul signs in their yard? You don’t have to be a billionaire with a great tax accountant, or have your own Caribbean nation… you just have to move to New Hampshire. That’s what my wife and I are doing next month.

The concept of the Free State Project is to get 20,000 libertarians to sign up to move to one small US state. As a long-time libertarian activist, this has always made a lot of sense to me. All too often, libertarians are an ignored minority. In the US, 49% of the vote = 0. If libertarians were concentrated in one area, we would have more ability to block taxes and maintain Constitutional rights… not just (or even mainly) by voting or political activism, but by creating a culture of self-reliance.

An online vote was taken among the first 5,000 people who expressed an interest in the FSP, and NH was selected from among several other candidate states. NH is already the most libertarian state in many ways:

NH is the lowest-taxed state by far, except for the special case of Saudi Alaska.

NH has no income tax on earned income. (If you’re one of those suckers who works for a living in California, your marginal income can jump over 9% just by crossing the NH border! And there are states even worse than CA…)

NH has no sales tax, either. Tax refugees from MA and VT sneak across the border to shop. (Those from VT usually wear disguises and cover up their Nader bumper stickers.)

NH is one of the most 2nd-Amendment-friendly states: concealed-carry permits are "shall-issue," open carry is legal. (Shockingly, NH has very low crime… I wonder why.)

NH has the highest per-capita number of Ron Paul donors.

NH has institutions left over from the days of the American Revolution. It has a citizen legislature; there are 400 state representatives, each of whom is paid $100 per year to keep their sessions very short and make sure the rest of the state government hasn’t bothered anyone that year. Towns are run via a more direct democracy, with citizens voting on line items.

And best of all for those interested in controlled experiments in political systems: VT, the highest-taxed state, is right next door! It’s like having North Korea a half hour away; you can show your children the horrors of socialism on your way back from the grocery store.

I drove through NH this fall on the way to job interviews, and it is kaleidoscopically beautiful. The rivers run through rocks (they look designed for kayaking); the trees were flaming red, orange and yellow (just figuratively, not like the trees around Malibu).

NH has an Ivy League school, ski resorts, a seacoast, a border with Canada, mountains, and a Southwest-Airlines-dominated terminal at Manchester. Its unemployment rate is low. (There is a "bear crossing" sign on the road near our new house, but I’m told the bear has a T1 line and VOIP).

NH is missing a few things. It doesn’t have the earthquakes, mudslides, smog, or fires of CA. It doesn’t have the tornadoes of Texas, the hurricanes of New Orleans, or the crime of Philly or Detroit (though if you want a big-city fix, Boston is just an hour or so away). Most of it is too high to be destroyed by tsunamis and too low to give you altitude sickness. It’s a lot like Tolkien’s Shire: not a place for people who are bored by having undisturbed time to work on their own projects.

So far there are around 8000 FSP members; about 500 are already in NH. Some of them run for local offices. Some of them campaign for Ron Paul. Some of them just work on their own businesses and take care of their neighbors. I’ll be joining them in December; maybe I’ll see you there.

Bill Walker [send him mail] works in HIV and gene therapy research in Rochester, Minnesota.

Bill Walker: Archives

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In the 21st century, you could go into a dentist’s office and have your teeth reconstructed. Teeth are made of a protein that has nucleation centers every 200 nanometers to trigger the growth of hydroxypatite crystals, and the rocklike hydroxypatite itself. The tooth protein was sequenced in the late 20th century, and the chemistry of the hydroxypatite was understood long before that. So in the 21st century, your dentist simply cleans the tooth, programs a small CAD-controlled machine with the desired tooth shape, tells you to say "AAH" and in a few minutes your tooth is better than new.

Unfortunately, dentistry hasn’t made it to the 21st century… most people still receive dental treatment developed in the 1840s. You go in to the dentist, he makes a bigger hole out of each cavity, then fills it with mercury amalgam. The amalgam expands and contracts more than the tooth around it, it conducts heat and cold far too well, and as a bonus it releases traces of mercury. The dental journals actually recommend not getting fillings at the first sign of small cavities, because they weaken the teeth.

So, the logical thing to do is… not get cavities. For most of us that would require time travel, so that we could get our public school vending machines to give us green tea instead of phosphoric acid carbonated drinks, vegetables and fruits instead of Twinkies, etc. Time travel may actually work… but it would be very expensive.

But if you still have some teeth, there is a way to build up more hydroxypatite on damaged or worn tooth surfaces. A cream containing sodium calcium phosphosilicate will release the correct ions when it hits saliva to rapidly deposit hydroxypatite. This coating of toothlike material reduces sensitivity of worn teeth as well as stopping the growth of many tooth bacteria; it’s like cement overshoes for Streptococcus mutans. (Bacteria on teeth and gums affect heart health as well as the attractiveness of your smile, so this is not a small benefit).

You can read a paper on a clinical trial of sodium calcium phosphosilicate here.

You can get this stuff from Novamin.com. It’s good insurance; after all, sharp teeth are the only weapons Americans can carry in airports, schools, East Coast cities, and other likely terrorist targets.

Bill Walker [send him mail] works in HIV and gene therapy research in Rochester, Minnesota.

Bill Walker: Archives

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Jess Huerta de Soto has written the ultimate vampire book. He tracks these bloodsucking monsters from the first documentary records in ancient times to the modern apologia for their maintenance at public expense. At last, there is a single book that scientifically explains the origin of vampirism, the magnitude of their drain on society, and proposes a systematic plan for their humane extermination.

De Soto starts out by driving a stake through the heart of the pro-vampire argument: that somehow vampires have legal rights. He goes through old legal arguments and shows that the right of a person to keep their own blood was established in Roman times. Also, he demonstrates that the concept of "fractional-reserve blood banking" violates all logically derived legal codes. Two people cannot both own and use the same hemoglobin molecules in different bloodstreams at the same time.

That’s silly, you say? No one would ever try to establish a system where two or more people owned the same property at the same time? That’s generally true, except where vampires are involved. Now, if you look at the grain industry, the elevator operators don’t try to loan out ten times more grain than they actually have in their bins. The same principles apply in the blood industry; if you make an autologous blood deposit for an operation, they won’t loan your blood to ten different vampires so that it’s gone by the time your operation comes around. But that’s because vampires don’t control the blood storage industry; they control the banking industry.

In Chapter Two, de Soto traces the history of the vampire bank, back into Greek and Roman times. Archaeologists have laboriously dug up the dusty records of many ancient banks. The records have a unifying feature: the banks, from whatever century, were fractional-reserve frauds, and every single one eventually defaulted. And the histories of Athens, Ptolemaic Alexandria, and Rome indeed show the effects of monetary expansion and contraction.

The author points out that one overriding factor pushes bankers into fraud. Of course there is always the desire for short-term gain, but that would generally be overcome by the desire for good reputation and long-term business. The deciding factor is the threat of confiscation by government. Banks with actual precious metal in their vaults were more tempting targets for gangsters like Alexander, Caesar, Herod, Cleopatra, etc. than "banks" which had loaned out their reserves a couple of times over. Fractional-reserve banks offered an opportunity for cooperation with the gangsters, in the form of armed force against depositors who wanted their money back.

The history lesson continues into the late Middle Ages, where we are shocked, shocked to find that the Medici banks were not completely honest. So dishonest were the Italian banks that they caused a decade-spanning economic collapse right before the Black Death.

Then in a bizarre twist we have to suffer through the story of the Bank of Amsterdam and a 150-year period of perfect banking honesty. No panics, no cheating, no economic cycles, just steady economic progress through revolutions, wars, and disasters of every kind. (Don’t worry, it’s the only known example of such length).

Chapters 3—8 could be called "You can’t eat your cake and have it too." You may think a long theoretical explanation of this unnecessary… but go ask your brother-in-law how banks work. He will loudly explain, using his thousands of hours of instruction from TV and the business pages, that the "money multiplier effect" creates prosperity, prevents Depressions, and slices our cake for us. He will also be asking you for large "loans" during the upcoming recession. Let me try to summarize the important points that he needs to know now (while you inform him in advance that you will be making no fractional-reserve loans):

What Your Brother-In-Law Should Know About Fractional-Reserve Banking:

1. The economic damage is done during the inflation. Not the recession, the inflation. It’s the inflation, stupid.

Politicians and central-bank bureaucrats like to pretend that only deflation is the bad guy; poor ol’ inflation is totally innocent, even beneficial. They claim to be "experts" at "keeping the boom going," "keeping the economy from overcooling," etc. etc. However, if you look at the flow of real resources, it is easy to see that printing more money doesn’t create more oil, silicon, etc. The economic damage is done the instant the first dollar of freshly printed cash lands in the bank vault and is loaned out to ten different businessmen. The ten newly optimistic entrepreneurs immediately run out and buy things. Now they have those things, and you don’t.

Then the damage is made worse. Not only do they reduce your access to real resources, but the overoptimistic dot-commers (e.g.) now organize those resources for a fantasy economy; an economy much bigger and richer than the real one. This causes them to buy more and different capital equipment than the actual economy wants. Eventually they are all set up to produce products that aren’t in demand, and find that people don’t buy their products. This is called "recession," and is actually the time when the economy repairs itself. The repair process involves devaluation of the misinvested capital resources, and unemployment (which is a devaluation of misinvested human resources).

2. (There is no "2." It’s the inflation, stupid.)

BTW, this is where we are today. The Fed has printed piles of money during the Clinton-Bush years. The capital structure contains piles of misinvestments. Now, either there has to be a reduction in inflation, and a recession while we reorganize our resources to produce for the consumers that actually exist. Or the Fed can just keep increasing the rate of the presses and print us into a hyperinflation, like Weimar Germany or Chiang Kai-Shek’s China. If they can’t find businessmen to borrow and malinvest, they can always find politicians ready to launch expensive WMD searches… at least until we run out of nations that don’t have WMDs.

The last chapter of Money, Bank Credit, and Economic Cycles points out that we don’t have to live like this. We don’t let grain elevators lend out ten times more grain than they have, then back them up with tax-supported bailouts. We don’t let vampires run the blood banks. If we didn’t let vampires run the money supply, then systematic malinvestment and recession would be a thing of the past. The cost of wars would be harder to conceal as well. No wonder vampires like fractional-reserve banks.

The book is free online, an anti-vampire service of Mises.org.

Bill Walker [send him mail] works in HIV and gene therapy research in Rochester, Minnesota.

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Burt Rutan (builder of Spaceship One) calls the NASA plan to return to the Moon "an archaeological dig." He isn’t kidding.

The Bush administration has announced some details of its massive crash program to "put a man on the Moon by 2020," or only about twice as long as it took in 1961 when no one knew anything about spaceflight, personal computers, etc. The plan for the launch vehicle is to use copies of the original 1960s Moon rocket engines from the upper stages of the Saturn V, except for the first stage which will use far less efficient and more expensive solid fuels. No, they are not kidding.

The crew capsule (a somewhat larger version of the Apollo capsule) will be named Orion in mocking reference to the far more ambitious 1960s nuclear-pulse rocket program. It will travel to the Moon using copies of the Centaur engine, the very first hydrogen-oxygen engine ever built (in the early 1960s). This is the equivalent of using copies of the Nina and the Pinta to replace steamships. But as NASA says, it’s certainly "mature technology."

Except that the "mature technology" will be assembled six decades after it was designed. The Nazi engineers who conceived the Saturn V have long ago died of old age. So the intrepid explorers in 2020 will be using antique chemical rocket engines, but in completely new and untested vehicles. Steamship engineers aren’t necessarily very good at building caravels.

The long-term goal is to put four astronauts on the Moon for six months in 2024. There should be no problem resupplying them, as by 2024 there will be numerous good Chinese restaurants on the lunar surface.

NASA has been steadily hurtling backward in technological time ever since 1972, when the last man left the Moon. The Saturn V which carried Harrison Schmitt could launch 250,000 pounds into orbit. The Shuttle weighed almost as much, but could only carry a theoretical maximum of 65,000 pounds (most actual launches have carried much less). And of course the Shuttle cost much more per delivered weight. A recent Popular Mechanics article pegged the Shuttle cost at about $115 billion for 115 launches, roughly $20,000 per pound.

The 1970s-design Russian rockets that support the US-financed Space Station and carry DirecTV satellites to orbit cost a bit over a tenth as much. Several private companies offer launches at comparable prices per pound, even while being undercut in the market by NASA-subsidized launchers. Getting to orbit simply isn’t rocket science any more.

The energy required to put a pound into orbit is about four kilowatt-hours… even in California you can buy that much energy for a buck. If there were secure property rights in space, then it would be worth it for private companies to invest in non-rocket technologies: jet bottom stages, electromagnetic catapults, gas guns, cables hanging down from orbiting asteroids… there are literally hundreds of engineering designs floating around. The same was true in the early period of air travel… the difference is that government didn’t monopolize air travel, or make it illegal to build new technologies. (Just try applying for a permit to build a nuclear cargo rocket….)

I’m not suggesting that NASA should or could be run more "efficiently." The 20th century showed definitively that a government agency can’t even grow rice efficiently, let alone build "new worlds and new civilizations." But we should be concerned that they aren’t even pretending to try… it means they think Americans won’t look up from their TVs no matter WHAT nonsense their rulers impose on them.

If NASA were to announce that they were going to use the 1960s NERVA nuclear rockets, build a Moonbase, go to Mars, etc., that would be plausible. Useless, irrelevant to real space industrialization and colonization, but bureaucratically plausible. If they were to announce that they were going to build rockets to travel to the close-approach asteroids and move them to Earth orbit, that would be plausible. But, try to stop thinking about Anna Nicole for a couple of seconds and focus here: they aren’t doing any of this. They never will.

The announced official space policy of the United States is that it will spend hundreds of billions of dollars to re-enact the 1960s Moon landing, but at half the speed of the original program. This would be like the State Department announcing that they were going to re-enact the Crusades, but use modern Cold War military equipment and spend trillions of…. Oh yeah, they’re doing that too.

The US government has abandoned any pretense of planning to live in a plausible future. The only firm guide to US policy is that nothing is permitted that has not been done before. This isn’t an unusual policy… for senile Emperors of decaying Empires.

Let’s just hope that no asteroids land on us before some other, freer nation starts the real (capitalist) migration into space.

Bill Walker [send him mail] works in HIV and gene therapy research in Rochester, Minnesota.

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The good news this month is that a Canadian team under Dr. Michelakis at the University of Ottawa has discovered that a simple, inexpensive chemical is a powerful anticancer agent, effective against a broad range of cancers. (Read their paper in the January Cancer Cell, subscription required). The bad news is that it is a simple, inexpensive chemical long used in medicine, and is not patentable. Thus there is no mechanism for getting the chemical (dichloroacetate, DCA) past the billion-dollar barrier of FDA approval. (The FDA actually only approved 17 drugs last year, and the drug industry spent 40 billion dollars on R&D).

Scientists have known since 1930 that cancer cells use glycolysis instead of aerobic respiration for energy. In other words, they don’t turn on their mitochondria and burn their glucose with oxygen, as do normal cells; they just convert it to lactic acid. While glycolysis provides about fifteen times less energy per blood sugar molecule, it works under the oxygen-deprived conditions inside early tumors. It also has the advantage of bypassing the mitochondria entirely, which allows the cancer cells to suppress the cell’s self-destruct mechanisms.

DCA forces the cell to turn on its mitochondria. This was the primary medical use of DCA in the past, to treat patients with rare metabolic deficiencies. For a normal cell, being "forced" to turn on mitochondria isn’t such a big deal… they’re already on.

But for a cancer cell, the mitochondria are time bombs. When the cancer’s mitochondria turn on, they run out of control, creating high hydrogen peroxide levels inside the mitochondria. This leads to a cascade of chemical reactions that eventually activates two different self-destruct ("apoptosis") pathways in the cell.

The ability to reactivate self-destruction is one of the "holy grails" of cancer research. There are other approaches to induce apoptosis in cancer cells, and perhaps some of them would actually work if they were combined with DCA. Also, even if it is eventually found that cancer can mutate and develop DCA resistance, the long period of regression could allow newer but slow anticancer concepts (such as telomerase inhibition) to finish off the remaining cancer cells.

So far Dr. Michelakis has demonstrated the effectiveness of DCA against various human cancer cell lines in a cell culture, and against human tumors growing on immune-suppressed rats. The drug has already been tested on human beings for many years as a treatment for a genetic enzyme deficiency. There are millions of terminal cancer victims on this planet. So, logically, the next step would be to find some volunteers and start trying to find the optimum human dose range, combinations of other apoptosis inducers that work synergistically with DCA, supplements to reduce side effects, etc.

Logically in our libertarian minds, perhaps. In the real world, nothing of the kind will happen. The FDA will not allow people in the orderly and profitable process of agonizing death by incurable cancers to try nonapproved drugs. No drug company, no matter how large, can afford to spend a billion dollars and 19 years getting a nonpatentable treatment through the bureaucratic minefield. There is no FDA-approved way to get there from here.

Someday a dedicated medical team working beyond the reach of the FDA (perhaps in Mainland China, which already contains numerous clinics that cater to foreign medical refugees) will defeat cancer1. In the intervening years or decades, terminal cancer patients in the US will be restricted to the same old patent medicines.

Note

1. If you’re a dedicated medical team working beyond the reach of the FDA, the rats in the study were given the same dose of DCA as human patients with enzyme disorders, 50—100 milligrams of drug per kilogram of body weight, dissolved in their water.

Bill Walker [send him mail] works in HIV and gene therapy research in Rochester, Minnesota.

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The Math-based Version

Let’s take the very rosiest assumptions for corn ethanol, from the paid PR flacks who lobby for the subsidy. They claim that it takes 35,000 BTUs of energy to make 77,000 BTUs of ethanol from corn. No one else gets a ratio anywhere near that good; some calculations show that corn ethanol actually costs energy to make (and fuel ethanol only has 76,100 BTU per gallon according to the EPA). But even this most unrealistic case assumes that about half the energy in a gallon of subsidized ethanol has to come from somewhere else. For comparison, it takes around 22,000 BTU to make a gallon of gasoline. Gasoline contains about 114,000 BTU per gallon, so there’s a clear energy profit.

Looking at market price instead of BTUs, on June 6 wholesale cost for ethanol was around $2.67 per gallon, vs. 2.09 for gasoline. This isn’t counting the cost of the subsidies; even cheating, corn ethanol still isn’t as good as gasoline. And mixing the ethanol in to make gasohol adds further refining costs.

So, the ethanol programs force us to pay more per gallon for a diluting fuel additive that gives only 2/3 the miles per gallon. This means more gas station stops, more wasted time and gas. And the ecological effect of each fuel?

Oil-based gasoline comes from very small drill holes in deserts, tundra, and sea bottoms. US ethanol is made from corn, grown in large dusty monoculture fields that must be covered with pesticides and herbicides. Ethanol programs subsidize soil destruction, deforestation, habitat destruction, and bunny-killing.

All so-called "biofuels" are a step backward ecologically. The US has reforested; 59% of the northeastern US is now forest. The eastern US has more forested acres now than in the mid-1800s. This reforestation is due to our replacement of biofuels with higher-tech oil, gas, and nuclear power. If we allow the market to improve our technology, eventually we would only use "biofuel" for grilling our salmon.

Not too many people are in favor of cutting down forests, polluting streams, and exterminating wildlife for money-losing programs that make us all worse off. So why has welfare for corporate moonshiners lasted since 1980? Some say that it is because these programs transfer billions to a few powerful people, while inflicting only a few hundred or perhaps a thousand dollars in damage on each American. Thus the concentrated interest has incentive for rent-seeking campaign contributions, while the burden on the average worker is lost among all the other taxes and government-sponsored cartel and monopoly exactions.

But there is also another ecological factor here: infosphere pollution. Those who benefit from multi-billion-dollar subsidies will spend tens of millions to spew polluting memes into the media. Thus, false science and economic fallacies fill up our hard drives and our minds, outcompeting the unsubsidized species.

According to the Environmental Working Group (a generally pro-ethanol group), corn subsidies alone were at least 41.9 billion from 1995—2004. The EWG points out that US politicians (including Hillary) have only supported expensive subsidized ethanol; overseas ethanol from more-efficient sugar cane production is kept out by tariffs. (So don’t write me that someone in Brazil has a great ethanol production company. I’m sure they do, but you can’t buy from them!)

Of course corn isn’t the only thing subsidized. From the evil-stained pages of the Fedronomicon, here’s the 2007 Department of Agriculture budget. Note that under the rigid fiscal restraint of the Republican "Contract With America," the budgetary authority for this one agency in FY 2007 is $96.4 billion. Those interests trying to capture this money will spend a lot to misinform the public.

Can we overcome infosphere pollution? Or are we doomed to pay for the destruction of our own environment, because the majority of media is produced specifically to confuse us into supporting parasitic special interests? Find out in the next exciting episode!

Bill Walker [send him mail] works in HIV and gene therapy research in Rochester, Minnesota.

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The Federal Reserve was forged by Senators Sauron and Aldrich in 1913 to "bring them all, and in the darkness bind them." OK, actually it was created by a group of evil banking wizards on a 1910 duck hunting trip, as all "regulatory agencies" are always summoned into existence by the criminal elements of the industries that they "regulate." The Fed does, however, function in much the same manner as the One Ring:

The Fed magically drains real wealth from those who use its creations. Since 1913 it has vampired 95% of the value out of the dollar, and thus out of those foolish enough to use the dollar as a "store of value."

The Fed allows the transfer of this wealth and power to the Dark Lords of foreign lands (under the Monetary Control Act of 1980). The Fed can, and does, simply print tens of billions of dollars to buy the worthless bonds of any dictatorial regime on Earth. This is called "monetizing foreign debt," and is very helpful to many of the Orcish governments.

The Fed makes the wielder invulnerable to market forces in the bond market. Anyone who knows Fed policy ahead of time gains the Fed’s power to vampire wealth from those who create it.

In 1929 and through the 1930s, as Bernanke says, the Fed hurled the entire US economy into the Great Depression and kept it there for years, unemploying millions. Civilization literally went backwards, with negative economic growth.

In 1933, the Fed magically stole all the gold from the bank vaults of the nation and moved it into darkness (a darkness so complete that the gold has not been audited since the 1950s). Dragons everywhere died of envy, moving them onto the endangered species list.

Today, the Fed detaches the military-entertainment complex from the need to openly pass war taxes through Congress. They simply print as many dollars as they want, reducing the value of all other dollars proportionately. The purpose of taxes is just to maintain a demand for depreciating dollars, since everyone needs them to send to the IRS.

Does the Fed render the user invisible? Well, it certainly makes him hard to see. (Just try getting an appointment with Bernanke now). And it makes it progressively harder for the wielder to see the real world. Even the strongest free-market economist will eventually be overcome by its power and reduced to droning incomprehensibly.

The Fed performs no productive economic function. All it does is increase the fluctuations in the value of the medium of exchange. Thanks to the "fractional reserve" nature of the Fed, it can’t even accurately control its own destructive powers.

Many Americans already realize that the dollar is a terrible store of value, and use it only for the shortest term that they can. Long-term savings are held in the form of stock mutual funds, real estate, and increasingly "exchange traded funds" like GLD and SLV… in other words, gold and silver, just as people have done for thousands of years. There is no barrier to people using any of these real commodities for trade.

Visa, Discover, Paypal, Ikobo, etc. etc. are all perfectly capable of electronically transferring any form of fully-backed private money around. The ancient "check-clearing" system of the Fed is ridiculous and redundant; why should money travel slower than the speed of light?

So the only reasonable solution is obvious to students of the Fed: send a multicultural task force to throw the cursed thing into an active volcano. Once the Fed is destroyed, monetary life could return to normal. US political strife would be reduced as well, since there would no longer be an all-powerful economic prize for the winning faction.

Bernanke, however, wants to keep his Precious. He thinks that the only thing the Fed did wrong in 1929 was not keep printing more money. So, his response to the upcoming economic crisis caused by the Fed printing money will be to print even more Fed money and send out the Fedwraiths to hurl currency down from the backs of Nazgul. (OK, he really referred to helicopters). This sounds great to lots of Americans.

There are two things wrong with Bernanke’s idea of showering paper currency onto the streets to "fix" deflation:

First, the Fed doesn’t only damage the economy during deflations. Bernanke ignores the damage done by inflation. In addition to simply stealing from those on fixed incomes, inflation damages the entire information flow in the economy. If no one knows exactly what money is worth, they can’t calculate profits and losses. The whole parallel-processing computer that we call "the market economy" gives inaccurate answers. For instance, all through the 1920s, the Fed inflated, and businesses thought they were doing better than they were. They overinvested in their existing product lines. Then when the Fed DEFLATED in the Depression, businesses went bankrupt and underinvestment was the rule.

The destruction of information doesn’t stop there. Inflation and deflation make it even harder to predict the value of money years in the future. If there is deflation, you can’t pay off your debts; if there is inflation, your savings, insurance payouts, bond interest etc. become worth less. Inflations and deflations transfer ownership of real goods around, scrambling property rights (and always in favor of those who know monetary policy in advance).

Second, Bernanke knows full well that the money helicopters aren’t going to distribute money evenly and proportionately to all holders of dollars. The government will print money all right… and they’ll spend it on more Mideast wars, more corporate welfare, and more vote-buying "programs." Even if the Fed wanted to, they couldn’t keep the ownership of real goods from getting transferred away from ordinary working men… and they don’t want to.

Will Bernanke use the Fed to inflate or deflate? The only certainty is that he will do one or the other, damaging the information flow through the economy… until enough people realize that it’s time to "to cast him down and have no one in his place." In the meantime, best not to have all your family wealth in dollars when Bernanke’s helicopters start blaring the "Ride of the Valkyries."

Bill Walker [send him mail] works in HIV and gene therapy research in Rochester, Minnesota.

Bill Walker: Archives

In the age of cheap nuclear weapons, this argument is even more persuasive. A dictator rising to power in Britain or France could reduce U.S. cities to rubble and kill most Americans not familiar with anti-fallout precautions (about 99% of the population). And, of course, there are the already existing autocratic kleptocrats of Russia, China, Pakistan, Israel, North Korea, etc., all of whom receive billions in official and unofficial U.S. aid to assist them in maintaining their nuclear weapon stockpiles without the inconvenience of increasing the level of economic freedom of their oppressed subjects.

Today’s threats have the potential to do far more damage than Hitler. The question is, are we bound to support a policy of pre-emptive wars in order to prevent future Hitlers? Must we bomb France? After all, France actually has WMDs and a history of imperialist expansion into this hemisphere.

Or perhaps the U.S. policy of Aid To Dependent Dictators actually creates more proto-Hitlers each year? Is there another path, a way that doesn’t depend on placing any group of politicians above the law, in the hope that they might protect us from nastier politicians?

It may be instructive to study the case of the original Hitler. Did governments of the time actually try to remove Hitler? Or did they treat him as just another member of the club, a good ol’ boy engaged in the gentlemanly arts of demagoguery, war, and tax collection? Fortunately, Roger Moorhouse has collected all the attempts on Hitler’s life into one volume so that we can fairly evaluate this question. The book is fairly short for lack of material; in general, governments made no serious attempts to kill Hitler. The stories of the private assassination attempts are more interesting.

In 1938, an ordinary German carpenter named Georg Elser was convinced that Hitler was going to plunge Germany back into war. Elser decided to kill Hitler. He set about his task in stereotypical German fashion, sensibly and methodically.

First, he traveled to Munich for the observance of the November 8 anniversary of the 1923 Beer Hall Putsch, an important Nazi holiday. Hitler was obliged to give a speech at the Burgerbraukeller for these festivities. Elser simply went in afterward and bought a beer. He observed the position of the speaker’s lectern and the structure of the hall. Then he went home and got a job in a quarry that used explosives.

In August 1939, Elser moved to Munich. Every evening he bought dinner in the Burgerbraukeller. After each dinner he hid in a storeroom until the employees left. Then he emerged and worked all night, constructing a hidden cavity in a pillar behind the speaker’s dais. On November 2, 1939, he installed a large homemade bomb. On November 5, he set the timers for the evening of November 8 (remember this is a German bomb, he had a backup timer).

On the evening of November 8, Hitler entered the Burgerbraukeller and gave his speech. Unfortunately, he was an hour early. Due to bad weather, he had decided to use the train instead of displaying his high-tech flair by flying. So he left the hall at 9:07. Elser’s bomb went off exactly at 9:20, not only blasting the lectern but bringing the whole gallery down onto the dais. Instead of killing Hitler and other high-level Nazis, he got only a few low-ranking supporters. (What, you thought this story was going to have a happy ending?)

Elser missed… but not by much. He demonstrated that any individual who put a few months of their time into killing Hitler would have a pretty good chance of success. Unfortunately, as the rest of Moorhouse’s book shows, the major governments of the world never spared as much as one full-time carpenter to kill Hitler. Stalin put elaborate assassination nets in place, but then carefully avoided any harm to Adolf, probably fearing a less destructive leader would make Germany more powerful.

The democratic Allies did no better. The British demonstrated that they could assassinate even the highest-ranking Nazis deep inside Eastern Europe, by killing Reinhard Heydrich. They produced James Bond weapons like the Welrod pistol and distributed them to resistance movements, and assassinated Nazi small fry all over Europe. But though they did a feasibility study ("Operation Foxley") on shooting Hitler at his retreat in the Alps, they too left him strictly alone. On April 25, 1945, the British launched a poorly planned exercise in futility by sending 375 bombers to blast Berchtesgaden. The results were the same as the attacks on Saddam Hussein at the beginning of the Iraq War; the dictator was nowhere nearby.

The American politicians followed the British lead. As the sharpshooting soldier says in Saving Private Ryan, they preferred to spend billions on killing ordinary Germans rather than sending in one sniper to Berlin. (Killing Hitler makes it plain that Hitler drove openly around Berlin until quite late in the war; he would have been no harder to hit than Heydrich).

Governments, whether "democratic" or openly totalitarian, are all driven by the same evolutionary laws. They gain power by maximizing the length and cost of wars.

"War is the health of the State" is a truism because it is true. Governments create and maintain Hitlers; if they remove one it is usually only to install another. (Ask the Poles and the Czechs how much they "benefited" from World War II).

Private protection companies as envisaged by the Tannehills, L. Neil Smith, or David Friedman, offer a different dynamic for the 21st century. They would be driven by competition and the profit motive to hold down costs and reduce collateral damage to the minimum. They would actually have the means and motivation to remove the genocidal Hitlers and Stalins of the world… and the firebombing Churchills and atom-bombing Roosevelts as well. "Wars" in the 20th century sense of slaughtering children might be eliminated as thoroughly as smallpox.

Taxpayers around the world pay something like trillion dollars a year for "defense." The U.S. taxpayer pays around half the total (possibly a little less if you use more realistic figures for the economic cost of draftees in China et al.). With the possible exception of the Swiss, most of these taxpayers get no increase in personal security for their money. It’s time some entrepreneur stepped up and offered a better deal: "All dictators removed, no tyrant too big or small. We take Visa."

Bill Walker [send him mail] works in HIV and gene therapy research in Rochester, Minnesota.

Bill Walker: Archives

A Remarkable Man is the $16.95 story (ouch! I thought the web was going to make obscure video cheap?) of Ed Thompson, Tommy Thompson’s more honest younger brother.

Having spent his youth in Toughman contests, you would think that the concussions would have properly prepared Ed for a political career. Unfortunately for him, he seems to have retained plenty of IQ, and he went into business instead. He opened the Tee Pee Supper Club in El Toboso… no, I mean Tomah, Wisconsin. He served spare ribs and ethanol, and put in a few video poker machines.

Then one day, the District Attorney decided to raid all the small gambling establishments in Wisconsin (not the big Indian casinos which Ed points out are only 50 miles from Tomah, just the little taverns and other places not up to hiring Abramoff or his ilk). Ed found his Friday night restaurant receipts confiscated, and faced the threat of 8 years in prison. A lesser man would have taken the proffered plea bargain and gotten back to feeding his family. Ed decided to fight.

First, he defeated the initial charge of illegal gambling. He never claimed to be anything but guilty, but it seems that no jury in Tomah would convict him. Note to other prospective libertarian troublemakers: reading to senior citizens pays off. Note to prospective troublemaking jurors: for Pete’s sake, don’t ADMIT that you know about FIJA: the cursed prosecutor will just look for more pliable jurors.

Following this victory, he took vengeance on the District Attorney, finding and funding an opponent to defeat him in the primary. The most touching moment in the film is the scene where the former DA talks about losing the only job he ever loved: that of persecuting his fellow citizens for victimless "crimes" like owning video poker machines.

Finding that door-to-door politics was easy for a tavern owner who controlled the massive Alcoholic Bloc, Ed climbed down the political ladder to become mayor of Tomah. He privatized a couple of things and paid off the city’s SuperFund obligation. Then, mad with power, he ran for governor… as a Libertarian.

I won’t spoil the ending for you… I can’t, you already know he loses miserably with 10.5% of the vote. There is much whining about how he was outspent… of course he was outspent, be wasn’t promising to give anyone any subsidies. In the advance auction of stolen goods, you have to be the high bidder.

Is this video worth the money? Sure! If it will talk you into spending your efforts on getting rich through business or legitimate, profitable political corruption instead of wasting your family’s livelihood on "idealistic" democratic politics, it’s worth ten times the price. (I should know; my wife got nearly three times Thompson’s vote total when she ran for state rep as a Libertarian in Dallas, Texas).

There’s a moral here: if you’re going to tilt at windmills, make sure you get more footage of the battle scenes. This video would sell a lot better with some images of black-clad donut-eaters grabbing all the cash out of Ed’s till. And they should have ended with a musical number; "To Dream The Impossible Dream" might be cheap to license. ~ "Sancho" Walker

Bill Walker [send him mail] works in HIV and gene therapy research in Rochester, Minnesota.

Bill Walker: Archives

From an economic point of view, this means that Mexicans who would have been assembling parts for American companies in Juarez are now assembling them in Houston. Obviously, the economic effects on American-born computer programmers in Seattle will be catastrophic. More of their products will be stamped "Made In America," lowering their perceived reliability. Seattle dwellers already live perched on the knife-edge of Seasonal Affective Disorder; the psychological trauma of knowing that their home appliances were made in the US might cause them all to commit suicide, or at least listen to boring pop songs about it.

The Taco Curtain

The solution is obvious. First, we pay Halliburton one trillion dollars (plus expenses) to construct a 100X-scale Berlin Wall around the entire United States (including Alaska, can’t have those treacherous Inuit smuggling non-government-approved workers in their umiaks… what kind of real Amurrican drives an "Umiak," anyway? Good patriots drive vehicles made in THIS country, like Hondas or Toyotas.)

Second, we will create another huge government bureaucracy to defend the country’s borders. We could call it the Defense Department…. no, the Homeland Security Department… well, all the good English names seem to be in use already by organizations that do other things (whatever those things are). I guess we’ll just have to outsource to a foreign source for the name; we could call it the NKVD (as most of the ex-Soviet Empire doesn’t seem to want to use that name for anything anymore).

Third, we force every human north and south of the Texas border (including the Canadians) to have a chip implanted that will display their SS#, retinal pattern, and detailed sexual preferences when scanned. The chip will be wirelessly updated by the new "collar" cellphones, which are locked on the neck when the child-citizen is tattooed with its SS#. When the GPS on the cellphone detects that the citizen is at latitude coordinates on the "wrong" side of the Rio Grande, it will detonate a shaped cutting charge that will implode the citizen’s head in a safe yet spectacular vertical collapse, a la World Trade Center 7.

Thus, we will finally achieve the neocons’ goal of "a place for every citizen, and every citizen in their place." Forever. This will free up US government resources for more important projects, such as suppressing Middle East oil production, nation-building in the Third World, and bringing democracy to Afghanistan and Florida (just kidding about Florida).

Those Awful Foreigners!

We instinctively fear and hate "the outsider"… even though Americans now come from every place on Earth, and few people suggest that any ethnic group be forcibly returned (except for those lazy, drunken Irish). Also, in modern times our fear of those outside the tribe is a little misplaced. No roving nomad can actually come and take your tribe’s favorite berry patch without paying for it… with the exception of any large developer who pays your city council to use eminent domain and turn your berry patch into a commercial development. But those large developers are rarely illegal immigrants.

From the very beginning of the Republic, American politicians have made emotional political capital out of the fear of foreign devils. First, in the 1700s, it was those irresponsible Germans who would threaten our "essentially English" culture (presumably from their excessive punctuality and thrift). After the Germans had become our second-largest ethnicity, worry turned to the aforementioned lazy, drunken Irish. The Irish in turn having become so popular that more people claim to be Irish than really are, other groups replaced them as the menace o’ the day. The stupid Swedes, the mindless Poles, the un-Christian Jews, the too-Catholic Italians, even the obscure Croatians (who sent us such shiftless drifters as Tesla); all this teeming refuse and more deluged our shores. In 1910, 14.7 percent of US residents were foreign born, much higher than today’s 10 percent or so.

All this occurred without much real interference from politicians. Only the Orientals suffered from the Chinese Exclusion Act of 1882, passed because of the well-known racial inferiority of the Chinese. It was obvious to the Americans of 1882 that no nation composed of Chinamen would ever be able to excel in the sciences…

In the 1920s, more brilliant Aryan master-race schemes were passed. One group restricted were the Japanese, thus ensuring that hundreds of thousands of smart, hard-working people were forced to stay in Hirohito’s Japan and work for Mitsubishi et. al.

Fortunately, not all the European Jews were kept from escaping to America before WWII. Though many thousands kept out by immigration restrictions went to unnecessary deaths in the Holocaust, at least most of the nuclear physicists managed to escape involuntary employment under Hitler. Jingoists should think really hard about an alternate WWII where Germany had not only the best jet aircraft, the most advanced cruise and ballistic missiles, but nuclear bombs as well.

When the best and brightest people can flee to the most peaceful and freest nations, the whole world is safer.

Or Maybe It’s The Awful Natives?

Libertarians should have learned by now to be a little suspicious when politicians offer to solve our problems with the use of minefields and secret police. Especially when it’s the same politicians who created the problems in the first place.

We laugh at the stupidity of our ancestors, who sincerely believed that Irish were all lazy drunks, Jews had low IQs, Chinese could not be doctors, etc. We now know that Irish are very productive drunks, Jews have inherently high IQs (the fact that their mothers make them study hard can’t have anything to do with it, of course), and only Chinese or Indians can be doctors or scientists (math courses are too much work for white students). However, as with any other area of life, these things are more accurately discovered by market processes rather than by a large secret police bureaucracy.

There are two legitimate worries about immigration. One is that the Mexican culture will produce millions who will vote for more government. This is a little funny, because it wasn’t illegal immigrants who voted us into socialism; it was our own English-speaking great-grandfathers who voted for FDR. Mexicans don’t even control their OWN country’s policies; Mexican (or any Third World nation’s) politics is always dominated by the faction that gets the most US foreign aid. (Remember when Clinton "found" $35 billion for the Mexican government bailout? Or is that one down the memory hole already?)

It is legitimate to worry about other people voting your money away. However, those people are already here. They are the fourth-generation welfare families; people like the CEOs of Archer Daniels Midland, Halliburton, et al. And they control the Diebold vote, which is now the biggest voting bloc.

The only solution to this problem is to educate the productive classes about economics, while they still outnumber the non-working. Hernando de Soto does this; so does Alvaro Vargas Llosa. And they don’t spend time blaming the clueless US taxpayer for funding the parasitic governing u2018elites’ of Latin America… although they certainly would be justified if they did.

Immigration is a Libertarian Opportunity

The other "problem" is that immigrants will expose the unworkability of America’s various socialist programs, including our Federally controlled schools and medical system, a few years before they would otherwise collapse. (The immigrants are actually funding the Social Security system, but fortunately it will collapse anyway). This is indeed a problem… for socialists. The existence of a welfare state makes open immigration into a problem… for them. Every immigration conflict is an insoluble conundrum for the statist, but an opportunity for privatization for the libertarian.

Open borders between the US states have been a force against state-government welfare programs. David Friedman put it like this on his blog: "If welfare is provided and paid for by the states, high levels of income redistribution tend to pull poor people into, and drive taxpayers out of, states that provide them. That provides a potent political incentive to hold down redistribution. This is one example of a more general principle: The more mobile taxpayers are, the more governments, like businesses in a competitive market, have to provide them value for their money, and thus the less able they are to tax A in order to buy the votes of B."

If you believe that forbidding Americans to hire Mexicans will help our economy, then surely it would help to forbid the people of New Hampshire from hiring immigrants seeking tax asylum from Taxachussets. Refugees from New Orleans should be forbidden to work or live in Houston. In fact, everyone should just stay in their father’s village and follow his trade.

Americans are being conditioned to live in a Soviet-style prison nation with border minefields, national electronic ID, travel controls, random searches, etc. all justified by the need to protect the welfare state against the poor of the world. It isn’t the libertarian’s job to defend the welfare state, or the Gulag that it always becomes. It is our job to point out that the State itself is the problem. Without the US government support for Third World kleptocracies, more countries would be free (and more people would want to stay there). Without public schools, "free" medical care, etc., immigrants would not drain our nation. They would power it, as they did in the early 20th century.

Libertarian supporters of the new NKVD say that we need a Berlin Wall around the US because cutting welfare is "politically impossible." This is nonsense. The welfare state is intellectually dead. Capitalism has swept the world. The only people still convinced that the elimination of government programs is impossible seem to be American libertarians; the "Communist" Estonians, Czechs, Chinese, etc. certainly don’t believe it. And eliminating the welfare state is the solution to all immigration problems.

It isn’t poor Mexican workers that are trying to take our freedoms away. Poor Mexican workers aren’t going to send your children to die in unending Middle Eastern wars, spy on your email, or disappear you to some foreign CIA prison. Every libertarian knows where the real enemy is (hint: think "Potomac" instead of "Rio Grande"). If it scares you too much to face it, don’t take it out on Juan or Pedro. You may be wading the Rio Grande yourself on your way south ten years from now. ~ "Guillermo" Walker

Bill Walker [send him mail] works in HIV and gene therapy research in Rochester, Minnesota.

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In The Other Path, de Soto examines why some nations became rich while others (including his native Peru) remain poor. He concludes that the governments of poor nations do two things. First, they make it impossible to establish small businesses legally. De Soto’s researchers traveled the globe and performed practical experiments. They tried to file all the necessary forms to establish shops, get taxi licenses, building permits etc. In poor nations they found that such elementary business activities take years, if they can be done at all.

Second, he found that poor nations do not secure the property rights of the poor. His teams purchased homes (or tried to) in different nations; they found that to get an official house title in a Third World city was a task worthy of Hercules.

In writing his later The Mystery of Capital, he discovered that today’s rich nations have completely forgotten how they got rich. No academic or bureaucrat that he asked could tell him the origins of Western property-rights systems. So he set out to trace the history of capital himself.

What he found by studying the history of the early United States was that a lot of property was not created by government plan. Much of the now formally titled private land originated as the homes of more-or-less illegal squatters who simply went out and lived on it. They claimed land through "corn rights" (having grown crops on it), "cabin rights," even "tomahawk rights" (just having marked a few trees on it, showing that they at least knew where it was and what it looked like… often more than the "official" absentee owner could say). The state and federal government often tried to remove settlers, but couldn’t muster the political will or military muscle to evict most of the rifle-armed homesteaders.

There were official Homestead Acts, but they accounted for only a minority of the privatized acres. The Acts were also vastly inefficient, as the size of plots was arbitrary and uneconomic, and subject to many corrupt abuses. Of course they were better than nothing; any privatization is better than none.

The Wild Wild Third World

People in Latin America, ex-communist countries, and the rest of the Third World today live under conditions similar to those of the early United States. Large tracts of land theoretically belong to governments or oligarchs with political connections. In practice, they are occupied by millions of what de Soto calls "informals"; the same type of people that George Washington would have called "squatters."

De Soto claims that the main difference is that unlike the state and Federal governments of the early United States, Third World foreign-aid oligarchies have never recognized the squatters’ claims. This leaves most of the actual economic arrangements of these nations in legal limbo. People who do not have good legal title to their homes and businesses are cut off from the capital markets. They are forced to circumvent the "legal" system that is open only to the rich, taking roundabout routes and using lower-capital, riskier business methods.

De Soto’s team estimated that the value of property "owned" by poor Third Worlders without good title was over 9 trillion dollars. Critics of his methodology have quibbled that this figure should be revised downward to 4 trillion. Of course no one has an exact figure, but it’s a substantial part of the global economy. His point is that if these informal claims were made secure they could serve as what he calls "live capital," i.e. the basis for financing businesses and farms.

De Soto’s Cure (Worse Than The Disease?)

To summarize de Soto’s prescription for Third World ills, he thinks that Third World governments should emulate 1800s American legislatures and incorporate "informal" property regimes into the system of formal titles. He states that this would bring the many benefits enjoyed by "developed" nation property owners, such as taxation, access to public utility monopolies, zoning regulations, etc. At this point I think he should have paid a little more attention to the results of his own historical studies.

In the 1800s US, land was brought into formal private property by a patchwork of individuals and voluntary associations. But 1800s landholders were owners, not owned. Taxes and inflationary financing were minimal throughout the 1800s (except of course during the Tariff Re-Establishment War of 1860—65). Many utilities were private; even in the early 20th century there were competing electric power plants who sold to customers who owned their own electric lines. The United States became rich not because of the smothering burden of taxation and crazy quilt of monopolies that exist today, but due to their absence. So could Peru, Egypt, or Myanmar.

It is true that some governments have been less obstructive than others. The post-WWII US occupation government in Japan, for instance, went to great lengths to establish secure land title for small landowners and fewer obstacles to small business. This is in interesting contrast to the US occupation government in Iraq, which has instituted a socialist price-control system so rigid that even gasoline is in chronic shortage.

Some ex-communist governments, e.g. the Czech Republic, have sold off their assets, successfully re-creating the private property systems that once placed them among the developed nations. Some of the Latin American governments, Peru among them, are trying hard to get the majority of their citizens into the formal land title system. Chinese farmers are using various unofficial systems to divide up and privatize the land of the former collective farms.

However, while former socialist and feudal countries are progressing toward capitalism, the formerly free countries are going in the opposite direction. The US Supreme Court recently said in Kelo v. New London that there is no right to private property. Only the various levels of government have the final say on who owns what.

Bringing Third World squatters into the world of present-day US property taxes, eminent domain, and regulatory fascism wouldn’t seem to be much of an improvement. De Soto’s longing for the poor of the world to come into the "formal" legal system ignores the fact that today’s formal system is not the same as that in 1800s England, the US, or even 1945 Japan. If Third Worlders paid taxes at the rate that the US middle class does, they’d probably starve to death.

The Anti-Homestead Acts

Far from passing new Homestead Acts to create more private property, today’s US government prints money and buys land out of the private sector. For private citizens to oppose this process is pretty futile; it’s a lot easier to print money than to produce real wealth. If the anti-privatization trend continues, eventually all the land in the US will belong to the Bureau of Land Management, Forest Service, et al.

Most of the government land is available for economic exploitation by the politically connected (only 10% of Federal land is in parks; even there, it is not safe from those with enough political power). However, since it cannot be privately owned, there is no incentive for those who politically control "government" land to preserve its soil or other environmental amenities, since they may lose control of it in the next election.

The last time I checked, the various levels of government in the US controlled about 42% of the US land area, all the rivers, lakes, and continental shelves. The US government also supports the no-private-property status quo everywhere else, through various UN treaties.

There has already been a large-scale test of government land ownership in modern times; it was called the Soviet Union. It led to ecological disaster on a grand scale. US environmental groups are notably silent about the Aral Sea, the Kazakhstan dust bowl, USSR state industry toxic dumping, etc. etc. Instead, they continue to support more transfer of US private land to bureaucratic control.

Absence of Property Is Theft

Proudhon was an idiot. There is no human progress without property. Any human society has to have a way to transfer new property into private hands. Minarchist, Anarcho-capitalist, or Absolute Monarchist, anyone claiming to have a workable political system has to explain how it will facilitate the transfer of property into private hands.

Most of the world’s land remains under arbitrary bureaucratic control, without secure private titles. As De Soto points out, land ownership in the Third World and ex-communist countries is largely determined by political influence. Even in Canada, only ten percent of the land is privately owned. None of the world’s seabeds, ocean fisheries, or major rivers (there are a few private trout streams in Scotland) are husbanded by private owners. While commercial access to space is routine, no one owns the asteroids… except for whoever is going to be lucky enough to be under the next multi-megaton impact. And maybe this guy. (No, probably not; I think he’s going to have to at least leave a few tomahawk marks on that asteroid before anyone takes him seriously).

The "perfect" solution to how to divide up the universe is unlikely to appear to mortals. But history teaches us that imperfect solutions work well enough. Once property is privatized and within a free market, it will find its way to the most efficient user. Any system for homesteading resources is better than none.

Some societies, even ex-communist societies, have learned that privatization is the key to creating wealth. The US government has not. A government that progressively transfers resources away from private hands has no future, and neither do its serfs.

Bill Walker [send him mail] works in HIV and gene therapy research in Rochester, Minnesota.

Bill Walker: Archives

In the 1960s and 1970s, Global Cooling was all the fashion. Newsweek warned of it. Popular books warned of the return of the ice. Aircraft contrails, dust and sulfates from coal power plants, volcanoes, desertification, solar variation, galactic dust clouds, fires from global nuclear war (has everyone really forgotten Nuclear Winter? Or is that meme still happily cohabitating with Global Warming in millions of muddled minds?), etc., would all combine to freeze the Earth. No political careers were built on fears of a milder Earth.

Fashions change. As Michael Crichton points out in State of Fear, one year it suddenly became unfashionable to look at cooling factors in the Earth’s climate. Today’s academic climatologists are forced to publish within the paradigm that the Earth is warming, that this trend will continue regardless of natural events, and that warming is bad. Major media is even more constrained; Newsweek is not running any stories on the cooling effects of aircraft contrails or the dust clouds from the nomads who yearly expand the Sahara Desert.

The Earth may well have warmed a tenth of a degree or two, if you pick the right starting and ending year; climate fluctuates for many reasons. But the other package-deal premises of the Global Warming meme are completely without scientific basis. There is no scientific reason to believe that the minuscule greenhouse effect from 20th century fossil fuel burning can overcome the sun-shrouding effects of a major volcano or asteroid hit. We know that either of these types of events is going to happen sometime; we just don’t know when (maybe 2036, if you’re the betting sort). And either one will pitch the Earth right back into an Ice Age.

Ice ages are not fun. Even minor cooling events are hard on agricultural civilizations. (You may think you’re living in a silicon civilization, but a few months with no sunlight will radically change your food vs. RAM preferences). Yes, if we were all living in concrete domes with home Mr. Fusion units, maybe Ice Ages would just be long periods of good skiing. But for now, we still depend on solar power for our food.

In the April of 1815, the Indonesian volcano Tambora erupted and spewed over a million tonnes of sun-darkening dust. 1816 was the “year without a summer”; the northern United States suffered crop failures and frost damage. The year 535 was even worse, bringing a literal Dark Age to Europe and freezing the crops of millions. These famines were caused by relatively tiny events, nothing like the Yellowstone eruptions or the Chicxulub asteroid impact. Major events would shut off outdoor agriculture for years. Of course we can always use growlights, right? Sure… if you use all the electricity on the planet for artificial lights, you should be able to grow about as much food as the farms of… Rhode Island. Everyone else will starve (well, except for the Mormons, of course). And maybe a few cannibals.

During major Ice Ages, most of the world’s ecosystems were displaced. There were no California redwood forests in the Ice Age; they are a recent development nurtured by the (natural) post-Ice Age global warming. 18,000 years ago, deserts and ice sheets covered most of the world. There is absolutely no scientific reason to think that it won’t happen again.

There is also no reason to think that there won’t be inconvenient short-term warming effects. But we can’t predict them; we can’t predict the weather ten days in advance, let alone predict all volcanoes, ocean currents, hydrates, asteroids, interstellar dust clouds, nuclear wars, solar cycles, etc. etc.

The Kyoto Treaty and other “anti-Global-Warming” efforts are not scientific guarantees of “better” (better for whom? I live in Minnesota!) climate. They are just sacrifices to the thunder gods, in the hopes that they will grant us an unchanging world. That ain’t gonna happen. The one sure climate prediction is that climate will fluctuate.

Ironically, so far government interference with the energy markets has increased Global Warming. The antinuclear movement in the US alone has caused the burning of 400 million tons more coal. Was this a good thing? We don’t really know, but the evidence is that the CO2 released from fossil fuel burning is wonderful for ecosystems.

During the last Ice Age, CO2 levels fell to less than half of the modern level. They had recovered to .028% by the late 1800s. All our fossil fuel burning has raised the CO2 to a whopping… .038%. But we still have a long way to go to get back to Jurassic levels. Back in the good ol’ days, when the ecosystem was really seething with life, the atmosphere was .3% CO2, about eight times greater than today.

These high CO2 levels made life very easy for plants with the original “C3″ photosynthetic system. In addition to their direct CO2 fertilization effect, higher CO2 levels also help in droughts. With enough CO2, C3 plants can close their “stomata” (pores) more, and lose less water.

As CO2 levels fell during the Age of Mammals (and Ice Ages), “C4″ plants (e.g., grasses) have tended to gain on older C3 species. Today, it is estimated that the optimum CO2 levels for agricultural productivity in C3 plants (which include wheat and other important crops) would be at least .070%. So we have to at least double the amount of fossil fuel that we have already burned… or more, if we increase the area of Earth that is hospitable to plant life.

Much of the world is desert even today. In fact, there is less total life in the sea than on the much smaller land area of our planet. Most of the ocean is “desert," in the sense of having very low densities of life. This is because most of the ocean suffers from a severe mineral deficiency. Iron is the limiting factor on ocean life over most of the world ocean. A tiny amount of iron will cause a huge increase in plankton growth. If the oceans were privatized, sea farmers would fertilize with iron…. And then we would really need to burn more fossil fuel to supply enough CO2. Fortunately, there is plenty left.

To Stop Global Warming

If one were really afraid of Global Warming, one would support:

1. Nuclear power
2. Privatization of lakes, rivers and oceans
3. Privatization of the world’s deserts, most of which would actually support CO2-absorbing crops if there were secure private property rights
4. Elimination of the FAA (aircraft contrails do have the net effect of cooling the planet)

Has anyone noticed any “Anti-Global-Warming” groups that support nuclear power? Private property rights in the Third World deserts? Ocean farms?

Neither have I. Maybe that means that they aren’t really worried about stopping Global Warming so much as they are about stopping Global Free Enterprise?

The fact is that we don’t know whether the world will cool or warm. If you feel yourself believing confidently in Global Warming, remember that you would have believed in Global Cooling just as strongly in 1975.

If Global Warming Happens

If the good ol’ boys that control the world’s governments (and fossil fuel companies, and “environmental” organizations) continue to slow down the adoption of nuclear power, then the CO2 levels will continue their slow rise. CO2 will never be the most important greenhouse gas (the main greenhouse gas on this planet is the sinister pollutant dihydrogen monoxide. DHMO, as it is commonly known, causes 95% of the greenhouse warming effect. Government water projects in the US have contributed to higher DHMO levels, and thus to Global Warming.)

However, CO2 levels might cause a slight warming over the next thousand years. (Or they might not; we don’t know whether they will overcome other factors). The terrible results of this would be that Minnesota, Siberia, Canada, and other real estate would become “SantaMonicaformed," so that people from California could live there. This would of course cause the collapse of real estate prices in California.

The other effects of a mild warming would be pretty benign. Both agriculture and wild ecosystems would be more productive. Rainfall would increase. Sea levels would rise, but the centers of the continents would be more livable. (And people have been building dikes for centuries. If the sea goes up a few feet, New York could just build dikes like the Dutch. Just don’t put the Corps of Engineers in charge of watching them…).

If Global Cooling Happens

Global Cooling, unlike warming, can happen as suddenly as the collapse of the California real estate market. If a large asteroid or volcano strikes, there will be no growing season in that hemisphere that year. Personally, I plan to stock up on these, just in case. (I’m already fully prepared if Global Warming hits Minnesota… I’ll just take off one of my parkas).

Whether the Earth warms or cools, the only way to produce the wealth and technology to adapt to changing climate is through the free market. Shutting down the economy through treaties and regulations is a guarantee that we won’t have the resources to handle Nature’s little surprises.

Bill Walker [send him mail] works in HIV and gene therapy research in Rochester, Minnesota.

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