Bernard Madoff was in the news again today. I quote here from a CNBC report, adding my own commentary to put the report into perspective.

Disgraced financier Bernard Madoff has arrived at federal prison in Butner, North Carolina, CNBC has learned, though it is still not clear if that will be his permanent home.

President Barack Obama and the sitting members of Congress have not been charged, much less convicted and sentenced, for crimes that make Bernie Madoff’s look like child’s play. Note well: I am referring here not to the assorted murders, assaults, and batteries for which these men and women are manifestly guilty—I say guilty because they not only admit these crimes, but proudly take public credit for them—but to certain of their strictly financial crimes.

Madoff, 71, was sentenced last month to 150 years in prison after pleading guilty in March to charges that his investment advisory business was a multibillion-dollar scheme that wiped out thousands of investors and ruined charities.

Madoff caused people to lose billions of dollars. The U.S. government has caused people to lose trillions of dollars, and it’s not finished yet. The public’s losses mount during every minute of every day. By its effects in discouraging work, saving, and investment, and thereby reducing capital accumulation, the U.S. Social Security system has caused the nation’s gross domestic product to fall significantly below the levels it would otherwise have reached. According to Professor Edgar K. Browning, a leading researcher in this field, “the available evidence suggests that Social Security has reduced [current] GDP by 5 to 10 percent.” Ten percent of GDP is now approximately $1.4 trillion—or about 28 times the maximum amount Madoff is believed to have cost his clients. Moreover, Madoff’s harm is a one-shot loss, whereas the U.S. government’s Social Security harm is an ongoing loss that grows annually. In the future, the annual loss will be even greater than the currently estimated $1.4 trillion or so.

 Authorities said Madoff had carried out the fraud for at least two decades before confessing to his sons in December that his investment business was a fraud and that he had lost as much as $50 billion.

The leaders of the U.S. government have carried out their Social Security fraud—essentially a Ponzi scheme, in substance exactly the same as Madoff’s scheme—since 1935, and they have yet to confess to their crimes, unless their family members have been told and have kept the confession to themselves.

Madoff, in contrast to the government, carried out his fraud in a civilized way: he merely misrepresented what he was doing, purporting to invest his clients’ money and to obtain a high rate of return on these investments. People dealt with him voluntarily. Those who suspected something was fishy did not do business with him, and some people went so far as to give substantial information to the SEC to show that Madoff’s business had to be fraudulent (which information the SEC ignored for years on end, of course).

The U.S. government, however, does not bother to claim any prowess in investing the money it forces people to surrender to its scheme. It admits that the “client’s” return is now close to zero (varying a bit according to the client’s age and other factors). Nor does it carry out its admitted Ponzi scheme in a civilized way. Not only is participation in the scheme involuntary, but the government threatens violence against anyone who fails to participate as it commands him. Thus, the government operates its Ponzi scheme in a markedly more thuggish manner than Bernie would ever have dreamed of. He might have been a crook, but he was not a thug.

Everyone (including Bernie himself) agrees that Bernie Madoff was a crook. What is the correct term for the U.S. government, or does the word government tell us everything we need to know about the honesty, humanity, and justice of its actions?

I don’t know about you, but I am getting a little tired of the drumbeat repetition of the “wise Latina” quote (which may be the point of inundating us with it: everyone is bound to soon say “Enough already! We heard it!”), so I decided to go see what Sonia Sotomayor’s oft-quoted speech looked like in context. The entire address, delivered at a symposium held at Berkeley Law School in 2001, “Raising the Bar: Latino and Latina Presence in the Judiciary and the Struggle for Representation,” is at The New York Times, here.

This is scary stuff. Expressing agreement with the proposition that “there is no objective stance but only a series of perspectives–no neutrality, no escape from choice in judging,” she continues:

I further accept that our experiences as women and people of color affect our decisions. The aspiration to impartiality is just that–it’s an aspiration because it denies the fact that we are by our experiences making different choices than others. Not all women or people of color, in all or some circumstances or indeed in any particular case or circumstance but enough people of color in enough cases, will make a difference in the process of judging [emphasis added].

One wonders what will constitute “enough,” and just what “difference” she is seeking?

And, again:

As recognized by legal scholars, whatever the reason, not one woman or person of color in any one position but as a group we will have an effect on the development of the law and on judging [emphasis added].

I don’t know about her, but I’m about her age and I spent my 20s and 30s establishing myself in male-dominated businesses by learning the ropes, working hard and achieving mastery. Somehow I don’t think that if only there had been more women working in those industries that the market would have functioned better.

Finally:

There is always a danger embedded in relative morality, but* [emphasis added] since judging is a series of choices that we must make, that I am forced to make, I hope that I can make them by informing myself on the questions I must not avoid asking and continuously pondering. We, I mean all of us in this room, must continue individually and in voices united in organizations that have supported this conference, to think about these questions and to figure out how we go about creating the opportunity for there to be more women and people of color on the bench so we can finally have statistically significant numbers to measure the differences we will and are making.

*”but”??!! I infer that this is a danger she is willing to assume unto her “wise” self.

Which leads to perhaps the more salient question: Is she “wise”?

Is she a Constitutional scholar? Does she know and appreciate that language has changed in the 220 years since the Constitution was ratified, and that what she as a “a wise Latina woman with the richness of her experiences” may understand those words to mean in the 21st century may likely differ from what the framers of the Constitution meant? Will she subvert her “experiences” to those of the Constitution’s framers, recognize that those experiences, very different to her own, nevertheless established what is the law of this land? As just one small example, our book, The Founder’s Second Amendment, examines primary documents — the founders’ own words as found in newspapers, correspondence, debates and resolutions — to conclusively show that these men, who had experienced first-hand the British army’s violent attempts to disarm the population as the most effective means of holding it subservient to the King, meant “the right of the people to keep and bear arms” as an individual right to keep (own) and bear (carry) arms (guns) — as the Supreme Court upheld last year in the Heller case. Or will she weigh in on the “Living Constitution” side, arguing that her experiences are more “relevant” to today and thus should be made to prevail?

Given her own question: “I wonder whether by ignoring our differences as women or men of color we do a disservice both to the law and society,” leaves little doubt in my mind which she believes and would pursue.

Heaven save us from a world in which the highest court to which one can appeal is ruled by “justices” who do not believe in any “objective stance” or “impartiality.” One could not for a minute hope for “justice,” but only “mercy” doled out depending upon the “circumstance,” with the “choice” of rulings settled upon by the black-robed rulers on any given day. I’d sooner trust the Oracle at Delphi.

Al Gore spoke in favor of the Waxman-Markey climate bill recently passed by the House, saying it will help bring about “global governance.”  He’s right about that.

Regardless of how you evaluate the threat of global warming, the threat of global governance is good reason to be skeptical of climate change agreements.

I won’t go into a discussion of the virtues of federalism and decentralized government.  Just think to yourself, though, about the 20th century world leaders who dreamed of world government, and the effects their ideas had on the world.

“Lawmakers, read the bills before you vote,” by Jeff Jacoby (Boston Globe)

This “Read the Bills” movement has finally cut through political pretensions to reveal that there is no “deliberative democracy” in the USA. Apparently, members of Congress are simply asked to “react” or express “feelings” or channel interest-group concerns about broad notions like global warming, the economy, energy, and so on.

Not that democracy is an unalloyed good, but words ought to mean what they say. Otherwise, William Graham Sumner was right about “public servants” throwing the Constitution overboard:

If you take away the Constitution, what is American liberty and all the rest? Nothing but a lot of phrases. . . .

Any member of Congress who refuses, then “guffaws,” at the notion of “reading bills” is a candidate for expulsion from Congress.  “Aye, there’s the rub”: who will read the bill of particulars against the scoundrel who presumes to speak in the name of “the people?” Who but his fellow scoundrels, who have continually mocked thoughtful, active, ongoing deliberation?

The Waxman-Markey bill (mentioned in above article) is a perfect example of the oligarchy in D.C.: fancy preambles with flights of prose followed by blank pages to be filled in later by a few “leaders” of Congress.

My worst students cannot read, write, or put together an extended argument for a position. In place of reason or analysis, they offer “feeling” or what they are told third-hand. To wit: They are perfect future congressmen (women) of America.

The best history students grapple with the primary stuff of history, its original intent, changing meaning, and significance. In the future, what can they “read” in between the pages of congressional acts? They cannot assume anything when few people had anything to do with the bill, and obscure bureaucrats file enabling regulations that carry enormous significance for future generations, all hidden from public view.

I’m sure we will be told that “Read the Bill” is not “on the up-and-up.” Right wingers must be behind it because they want to slow down the work of Congress. Leave aside the bare fact that Congress is not working and we still have ample exhibits of “right-wing” laws (e.g., USA PATRIOT Act) that sprang surprises on the Left because “we don’t read those things.”

I have researched the papers of men and women in nine presidential libraries, along with the records of many congressional committees. What impresses me is how little the White House and Congress know about the functioning of government. Some say that government has become too big to be safe (the Left) or efficient (the Right). I say government has become too big for democracy. If that is true, why bother voting? Heresy, but there is an argument for “those who refuse to vote.” (See Carl Watner and Wendy McElroy’s The Dissenting Electorate).

In short, our long march into oligarchy reminds me of the Old Whig slogan (I am working from memory):

“Man is free on election day, and everywhere in chains between elections.”

Further reading:

The End of Liberalism: The Second Republic of the United States (1969), by Theodore J. Lowi, offers a stinging and cogent critique of congressional abdication of its constitutional responsibilities, both by refusing to properly deliberate and by simply handing the task of governing over to staff and unelected bureaucrats.

Arthur A. Ekirch, Jr., The Decline of American Liberalism (1955, rpt. 2008)

Robert Higgs, Against Leviathan: Government Power and a Free Society (2004)

Here’s a very interesting post (with a link to accompanying PowerPoint slides) by Justin Ross at The Perfect Substitute on a lecture he is giving.  The lecture is provocatively titled “Why We Need Economics to Make Policy: An Introduction on How Not to Kill People.”  The title is appropriate: being cavalier about the economic way of thinking sometimes means that people die.  Here’s my new favorite quote from Ludwig von Mises: “A citizen who casts his ballot without having to the best of his abilities studied as much economics as he can fails in his civic duties.”

Over at Reason.com, Damon Root has a review of my new book Race and Liberty in America: The Essential Reader (University Press of Kentucky, in association with the Independent Institute).

It is available here and here (Amazon is currently discounting).

The softcover is priced for classroom adoption and general readership, and as blurb-writer Juan Williams said, the book is “full of revelations.”

This is one area (classical liberalism and race) that historians ignore (or besmirsch) and classical liberals focus on other things (economics, war). But, I argue, through commentary and nearly 100 primary source selections, classical liberals played a crucial role in the civil rights struggles of not only blacks but also white ethnic immigrants, those of Chinese or Japanese descent, and immigration in general.

Hopefully, teachers will right the lop-sided Ship of History by balancing current readings with this “neither Left nor Right” way of viewing our history.

Warren Buffett says the economy is not recovering and we might need a second stimulus package to turn things around.  In other words, what we did before isn’t working, so let’s do it again.  Insanity has sometimes been described as doing the same thing over and over and expecting different results.

When George W. Bush was elected, the federal budget was in surplus.  During the Bush administration federal expenditures increased by 46% and he left office with a deficit of $459 billion.  If increasing government spending and running big budget deficits really stimulated the economy, by the end of the Bush administration we would have been in nirvana, not in the worst recession in a quarter of a century.

Government spending is a burden the rest of the economy has to carry.  The “stimulus” programs we already have will slow the recovery, and more “stimulus” will slow the recovery even more.  During normal times Congress is very good at spending money without the need for outside encouragement.  To encourage more spending now, when we are looking at annual deficits in excess of $1 trillion as far out as projections are made is just irresponsible.  And insane.

Gregory Rehmke (Economic Thinking and the Foundation for Economic Education) will be speaking to homeschoolers in Idaho on July 15. The topic: reforming environmental policy. Students interested in Lincoln-Douglas debate competitions will find this program especially helpful.

(Students unable to attend will have the opportunity to hear him give two talks at our own Challenge of Liberty Student Summer Seminar, August 10-14.)

Here are the details for the July 15th event:

When: 9:00 – 3:00 p.m.
Where: North Idaho Speech & Debate Camp, 1138 E. Poleline Avenue, Post Falls, ID 83854
Seminar Fee: $10/person (if not attending North Idaho Camp)
To Register: Send email to Greg Rehmke (grehmke@gmail.com)

Schedule:

9:05 – 10:05 a.m. The Prosperity Paradox and Environmental Regulation
Prosperity naturally brings cleaner air and water and improvements in nearly all other environmental measures. But as people grow wealthier, many believe pollution and other environmental problems are getting worse.

10:15 – 11:15 a.m. Entrepreneurs, Enterprises and the Environment
Free-Market Environmentalism (FME) focuses on the many ways that for-profit and nonprofit enterprises solve environmental problems. Clear and enforceable property rights along with rule of law.

12:50 -3:00 p.m. Cooperation, Competition and Achieving Excellence
Presentations and discussion of Lincoln-Douglas topic. Natural rights vs. utilitarian analysis. Excellence vs. Areté. The key role of cooperation in modern economies. Markets and prices coordinate the activities of millions.

Speaker:
Gregory Rehmke directs programs for Economic Thinking and is a program consultant for the Foundation for Economic Education. He has given talks for the Federal Reserve Bank of Dallas and Houston World Affairs Council seminars for teachers, and Institute for Economic Studies-Europe seminars for college students. He is co-author of The Complete Idiot’s Guide to Global Economics and has written and lectured widely on environmental topics.

Bruce Bartlett just informed me of the sad news that my friend, and Independent Institute Research Fellow, Professor William Marina, died this morning of a heart attack. Bill was a fearless friend of the truth and his passing will be a great loss for us all.

I was first introduced to Bill about twenty years ago by his friend Leonard Liggio. We had a wonderful lunch discussion about American history including his dissertation on the American Anti-Imperialist League. Of all the anti-imperialists, he had the kindest words for U.S. Senator William Borah, an insurgent progressive who opposed empire.

As I grew to know Bill a bit better, I could see that his admiration for Borah made perfect sense. Like many of the insurgents, Bill was suspicious of all forms of militarism, imperialism, and bigness in any form, whether private or public. Bill had strong libertarian inclinations but was best described as a decentralist. He was very much an independent thinker and full of surprises.

In our conversations, I consistently found Bill to be a source of infectious enthusiasm. He described himself as a Taoist and that too made sense when you got to know him. He had an upbeat, but somewhat fatalistic, attitude toward passing events. He was a wealth of insights on such varied issues as the history of bureaucracy, Chinese traditions of localism, the need to promote alternative forms of higher education outside of the universities, and sustainable housing.

Because of his experiences as a Fulbright Scholar and economist for the U.S. Joint Economic Committee, he had many illustrative stories about the corrupting influence of foreign aid and the military-industrial complex.

Remarkably, Bill had been on Dealey Plaza on the day of the Kennedy assassination. Although very much a radical in his opposition to centralized power, he rejected all the JFK conspiracy theories as nonsense and planned to write a book about it. Bill believed that Oswald did it, and did it alone and that the Warren Commission was essentially right. He often compared Oswald to Herostratus who had burned down the Temple of Artemis just so he would be immortalized in history.

Bill was not just a talker. Even while he taught classes at Florida Atlantic University, he made a success in real estate by making efficient use of small, odd-shaped parcels that might otherwise have gone to waste.

Although retired from his university position, he was still a bundle of energy and future projects. Most recently, he set up the Marina-Huerta Educational Foundation to build “self-help,” affordable, and environmentally sound housing. The Foundation built a community center in Guatemala, and Bill hoped to introduce these techniques to the United States.

It is a great shame that he could not have lived longer to finish some of his projects.

I used to love Franken on Saturday Night Live. Although his Stuart Smally character got old very quickly, he did a wonderful Paul Tsongas impression. I’d link to an example on YouTube, but NBC takes its intellectual property very seriously and therefore hundreds of the most humorous bits ever to air on late night television have been tragically withheld from us.

I enjoyed his 2003 book Lies (And the Lying Liars Who Tell Them): A Fair and Balanced Look at the Right. Well, I enjoyed the first half, much of which was a trenchant critique of modern, Fox-style conservatism. Some of the worst distortions of the Bush-era right were properly put in their place. The second half was just left-liberal boilerplate.

But this is what has always stuck in my mind about Franken’s book. It includes an illustrated chapter called “Operation Chickenhawk: Episode One” in which he characterizes many modern war advocates as hypocrites for their effortless success in dodging “service” in Vietnam. The chapter discusses such prominent hawks as George W. Bush, Dick Cheney, Bill O’Reilly, and Bill Bennett. But one big problem with this humorous chapter is it includes Pat Buchanan, who, although we might all agree holds many bad positions, including on the Cold War, did not support the Iraq War. But do you know who did? Al Franken.