I just saw an interview with J. Craig Venter, famous for his participation in the human genome project and now CEO of Synthetic Genomics, in which he stated that he is creating a microbe which eats C02 and creates hydrocarbon fuel. That’s right, you heard me correctly. Using genetic engineering, they essentially assemble this little bug and it does this biologically. HOLY *^&%!

The interview is incredibly telling. Venter describes how this work is feasible and scalable, and how energy companies are investing to develop it as commercially viable. He describes how the resultant fuel would be usable in current combustion engines with no modifications. As I listened, I began to get angry though. First, you’ll note the questioner’s insistent tone when asking has about whether the current inaction in Washington, DC is hurting him and his obvious disappointment at Venter’s answer, which is essentially that he doesn’t need any help from the government. I can almost hear the gasps from AGW fetishists who believe the AGW is more evidence of the flawed nature of capitalism.

I then went to the web to research this topic and found myself a bit stymied. The green type of sites reporting on this interview focused on one comment, taken utterly out of context, in which Venter says that without scale, the companies working on this are ‘just playing’. They completely downplay the fact that he claims he has the funding to move ahead already from private industry, including 600 million usd from Exxon Mobil. There was very little other reporting on this topic. Can you believe that? I think that this is due to the fact that Venter isn’t singing from the AGW hymn book about needing to completely change our societies, economies and lives in order to survive. Rather, he proposes a solution that negates fossil fuel dependency and consumes vast quantities of C02 in one fell swoop, a solution that is at once breathtakingly elegant and simple, and that works with our existing industrial infrastructure.

Wow. Okay, I don’t want to get too excited because obviously this has a ways to go. But if he’s right, and look for yourself, he’s not claiming this is some whacked out idea, no, he has the science down pat and he’s a legitimate, credible serious person. He’s already rolling out a significant pilot program. So this isn’t just some hope – it’s real and viable. Do you realize what this means? First, all govt spending on ‘Green Everything’ is unnecessary. Worst case, from a public policy standpoint, we might want to put a carbon tax in place (I love the revenue neutral idea being proposed, btw, if we have to have one at all) to create stronger incentives to adopt it, although I don’t think it’s needed. But that’s it. We are done. No more IPCC, no more green proselytizing from every progressive political hack – no more teaching our children that doomsday is coming! We can stop giving vast sums of money to oil producing countries that prop up their evil regimes with petro-dollars. Okay, you get the picture.

My biggest question is why this isn’t leading every newscast in the world? Answer: Because the AGW issue is so politicized that it’s no longer about the environment. They simply couldn’t take it if their crisis was actually solved by the free market, not government, and all of their rent-seeking, anti-capitalist garbage was invalidated. Check it out – tell your friends, this could be the ‘game changer’ we’ve all been hoping for.

So what is this twist? In a nutshell, it’s that Beck is actually intellectually curious about the world and this is very engaging to a group of people who are sick of being treated to very simplistic polemic every day. Beck’s popularity is a rejection of the ‘talking points’ hectoring of major conservative talkers – folks on the left just don’t get this, btw. He tells his own story enough, so I won’t repeat it all here but essentially he claims that he woke up after 9/11 and really began trying to inform himself about the world. He’s an everyman that regular middle class Americans can relate to, and he’s taken his viewers on an intellectual journey through history, philosophy, economics and political thought in a way that no college professor or pointy-headed intellectual could ever do. He brings along with this a set of traditional values which can loosely be described as ‘faith and family’, that give great comfort to his audience. His self-styled political philosophy mirrors that of the Tea Party in that it is hard to articulate the actual differences between him and traditional Conservatives or Republicans in both rhetoric and substance. He often makes reference to libertarianism and at one point actually claimed that he should have voted for Ron Paul, although this admission was primarily based on Ron Paul’s critical view of our rigged economy, not the rest of his philosophy.

So, what’s wrong with that? Well, first, it’s painful to watch if you actually know something about the subjects he’s exploring. Let’s take one recent example of how he gets it so wrong. He’s been trying to understand the epistemology of left and right, communism, fascism and progressivism – but notably not conservatism. He’s put together a spectrum of political belief with anarchy at one end and totalitarian government at the other, rightly concluding that Fascism is totalitarian, as well as Socialism. However, he completely neglects the fact that Socialist theory (admittedly, not most of the practice of it) is democratically based, and in fact calls for all industry/business to be run by democratic cooperatives and have elected leadership. This is the problem with a one dimensional analysis. He gets totalitarianism correct but completely neglects the idea of authoritarianism. He then throws them in the same bucket, and at this point loses all serious students of the topic. Fascists and Communists were arch enemies in Nazi Germany, and the communists saw themselves as the proponents of freedom, which the Fascists had no interest in.  I will stop detailing a critique of his specific thinking at this point because I don’t listen to most of what he says. But, from a broad standpoint, I think it’s fair and accurate to say that he really misses the intellectual underpinnings of the enlightenment and how classical liberalism has driven political philosophy forward. More directly, I think that if he’s going to posit himself as trying to understand and explain political thought and the history of it to us, he needs to do a much better job. Fyi, if you are tempted to think I’m sympathetic to communism due to the previous statements, you couldn’t be farther from the truth and in fact you are falling into the same pseudo-intellectual trap as Beck. Check your facts, Marx and his ilk based their entire theory on advancing their version real freedom for people – however wrong they were. It is utterly different from Fascism. You should also know that socialists play the same trick on capitalists, identifying fascism as a form of capitalism. Essentially, Beck is engaging in a combination of Red-Baiting and Nazi-Baiting – it’s intellectually invalid and not even new. Any undergraduate student of the topics he’s discussing would be able to easily identify the flaws in his thinking.

It must be said that much of what he’s wrestling with is understanding the canon of what used to be referred to as a ‘classical education’. Four years in an undergraduate history program that focuses on western civilization (unperverted by Critical Theory, admittedly hard to find) would do him wonders. It’s painful to watch him try to sort this out on his own, and between his radio and TV show, he does this for four hours a day. It requires a certain arrogance to put yourself forward as an authority while one is so self-admittedly ignorant, and also begs the question of why wouldn’t he spend his time putting people forward who know the subject far better than him. Yes, he does have many thoughtful guests, but really, if he wants to educate people in the way he claims he wants to, he would put them front and center to actually teach instead of using them as props. What Beck does instead is continuously move back and forth between polemic and inquiry in a chaotic way, with the ultimate aim of aggrandizing the world view he holds a priori.

Special criticism is deserved for his treatment of religion. Having had the hackneyed ’spiritual awakening’ that only the ‘recovering alcoholic’ can have, he fervently promotes a brand of ill defined spirituality that he has absolute faith in. I stopped drinking with the help of AA 15 yrs ago, successfully, and adopted it’s spirituality for a few years, so I can speak of this authoritatively.  Apparently this week he’s going to discuss the role of ‘faith’ in our nation’s history. He teased it on his radio show today as showing how our countries values and, by implication, its radical adoption of individual liberty arise from the teachings of Moses, as embodied in the Ten Commandments. This just isn’t so, and in serious intellectual circles, again,  it can’t even be taken seriously. Here are a few reasons why, for those of you under his sway. First, The Enlightenment and the concept of individual liberty – better described as individual sovereignty, meaning that one owns oneself – arose in direct opposition to man’s previous state in society which was being the subject of God and King – and the King’s authority derived from God in the first place. Clerics of various religions were very powerful and the state used this power to visit and justify merciless depredations on its subjects. The idea that you were born into something other than this condition was a radical departure from the ‘faith based’ world of pre-enlightenment history. This is not debatable – it is an accepted fact. Go study this and you will find I’m correct. Second, the many of the founders of our country weren’t religious people. Key ones, including Jefferson, Adams, Franklin and others rejected Christianity and all religion, thinking of themselves as deists, at most. While it is without a doubt true that there were many Christians involved too, they all agreed to put in writing a prohibition of the state establishment of religion in attempt to stop the imposition of religion on man. It needs to be pointed out that while the Declaration of Independence has liberal mention of a God/Creator,  it is not the founding document of our country or government – it’s the document that separated the colonies from England’s despotism. The U.S. Constitution, which formed our nation, makes no mention of God and requires no such belief to adhere to its principles. I could go on – many have – but Beck, and many other Conservatives are so wrong in this assertion that it’s breathtaking.

Last, but not the  least of his failings, is Beck’s co-opting of the libertarian mantle in some people’s eyes. Yes, he sees the corruption of our monetary system by the Fed, yes he sees the abrogation of freedom that flows from the Progressive movement and yes he understands the importance of the rule of law but that does not add up to being a libertarian. Libertarians are for a radically different relationship between the state and individuals, one in which our current militarism is unthinkable and where your gay next door neighbors might sit on their front lawn doing bong hits with no fear of intervention by force.  The Libertarian Party is “The Party of Principle” and we are unafraid to go to the places that these principles will take us. I’m not saying he has to agree, but the phenomena of Conservative Christians adopting the rhetoric of liberty is not new and when you really boil down Beck – and the Tea Party for that matter – both are very hard to distinguish from the the Neo-Con, Christian Republicans.

I do think that there is hope for him and his followers. My general sense of them from their calls to his radio show and my encounters with them in the blogosphere is that most  have never really studied political philosophy before encountering Beck, and as such,  make some simplistic assumptions about the world that undermines their reasoning. Unlike snarky elitists on the left and right, I’m okay with that. Most of these people have been busy building good lives for themselves and their families, and in many ways are the backbone of American society. Not everyone can spend years reading Locke and Friedman, Mao and Rawls and reflect on them thoughtfully. As well, many self-styled liberal/progressives don’t understand the foundations of their philosophy either. That said, this does not let Beck fans off the hook – if you want to argue political philosophy, you need to actually study the topic, otherwise you will end up sounding like an ass. So, be true to Beck’s call, educate yourself, hold yourself to the principles you espouse and learn for yourself. Encourage your children to be educated in the classic canon and push your educational institutions to do so.

As for Beck himself, he should engage more true intellectuals on his show. I’d love for him to have say Christopher Hitchens on for an entire hour or even a week to discuss the epistemology of classical liberalism. He should sponsor more debate on his show between intellectuals, say a Tom Palmer from CATO versus the current head of the Socialist party. He should spend more time on ideas like ‘Social Justice Theory’ by John Rawls, and give air time to criticism of it. Progressives think they are serving a higher purpose, justified by these lines of thinking and Beck could do real intellectual damage to their cause if he stopped the Red-Baiting. Sadly, mostly what he’s doing now is talking to the same folks the conservatives have always spoken to, and with only a slightly better message. In fact, it may be worse, because many people think they are being educated by Beck, when,  they’re just mostly being subjected to agitprop. It’s sad because Beck comes close to doing something much more profound, and as such, it’s a real missed opportunity.

Obama and his hackneyed ilk like to prattle on about how Gitmo or our harsh interrogation tactics are actually causing Al Qaeda to grow by providing PR fodder for their recruiting drives. It is true that the U.S. is continuously villified in Arab/Muslim media for many things, including these issues, but if you spend some time on Al Jazeera (easy to do, they publish on YouTube) or other sources, you’ll quickly realize that U.S. caused civilian casualties is the biggest issue they scream about. Today’s report of 27 civilian deaths caused by NATO air strikes in Afghanistan is business as usual for us (despite our apologies) and you can guarantee that this will be huge on Islamic media.

Rightly so. U.S. and coalition forces have killed thousands – maybe tens of thousands of civilians in both Iraq and Afghanistan. It is also true that many more civilian deaths have been caused by ‘insurgents’ of various stripes. It seems clear at this point that in the Muslim world an individual’s life is not worth that much when taken by a fellow Muslim in the name of Allah (pause, throw up, continue). However, that doesn’t matter when measuring our own actions against our own morality, and in fact, it’s clear that some of these deaths are the foreseeable consequences of our actions so we do bear some moral responsibility for even these deaths. It’s this dissonance that is used against us and what makes our claim of serving the higher purpose of freedom ring hollow in the Muslim world.

The facts are hard to find, as the reporting is always sketchy and politicized, and our own defense dept isn’t very forthcoming about this issue (understandably). Fighting an insurgency is, defacto, something that occurs in the midst of civilian populations and will result in civilian deaths as collateral damage (what a euphemism that is, ehh?). After all, the insurgents don’t wear uniforms (not unlike many militia-men in our own revolutionary war, btw) and many civilians support the insurgents openly or covertly, so they may even be legitimate targets in some sense. Even taking all of this into account, the bottoms line is that we are killing innocent people every day.

Just look at our drone attacks in Pakistan on Al Qaeda and other targets. Obama has launched 57+ such attacks since taking office – more than Bush did in his entire administration. Since the inception of this tactic, we have killed about 900 civilians in drone attacks. Just stop and think about that for a moment. From remote control in Nevada, the USAF is launching and controlling these unmanned drones, not unlike a video game, in your name. What do you think that is like for some poor peasant living in Waziristan? They see robots in the sky tracking them down, blowing them, their friends and family members up. If you lived there, what would you think? Do you think you might want to join up with the only folks brave enough to fight back?

Don’t get me wrong, I’m not supporting these Islamic maniacs. The Jihadi movement is repugnant to me in so many ways.  However, I cannot stomach these civilian deaths. There are many reasons to oppose our interventions in Iraq and Afghanistan (and elsewhere, be on the lookout for what we are doing in Yemen), but this is something that breaks my heart, and I think that it creates a future generation of Jihadis to fight us. Hmm, why doesn’t Obama talk about this as a recruiting tool? Answer: He’s just another political hack without any real vision. Some of us saw this ahead of time, but hey, it’s not like McCain was any better.

Libertarians believe that we should only initiate force in defense of our rights, and country (although some libertarians would debate the latter). Our policy of non-intervention in foreign affairs is based on the beliefs which many of our founding fathers held dearly, and a belief that the unintended consequences of our actions ultimately make the world less safe for Americans. We also believe that we cannot afford our military adventurism – with a price tag of over 700 billion slated for 2010. Can you imagine? That is more than the GDP of 170+ countries. It is wrong, scary and very far from what I want America to be. How about you?

I think that one of the problems which pervades the social sciences is the lack of valid testbeds for their theories, and the fact that they don’t often like to digest negative results. Take Marx, who is held as one of the three fathers of the field of sociology; despite the observable fact that dialectical materialism doesn’t predict outcomes in the real world or that the “Proletariat” hasn’t risen up in revolution, Marxism still holds great sway in leftists political circles. These are two central tenets of Marxism that most honest adherents of Marxism has admitted are not valid. It’s like believing the world is flat after it’s been proved otherwise, but that doesn’t stop them.

The internet is uniquely able to connect us, both individually and collectively.  I think it provides great insights about our nature which do real damage to the assumption that people aren’t well equipped to run their own affairs much more readily than the average leftist would have you believe. Lets take two examples that just scream out for notice. eBay and Craigslist. eBay is an absurd business, if you just stop to think about it. You bid on stuff that you can’t physically see and send the person money, hoping they send the stuff you bought, and that the stuff actually works. When eBay was going public, it had real difficulty convincing investors that the business model could scale because many investors reacted with real doubt that people would trade with each other fairly. Yet look at the reality, eBay is a multi-billion dollar business in which millions of buyers and sellers continuously do just that, with very low levels of fraud. eBay does some policing of the site, but in fact has a predisposition against overly regulating buyer and sellers, leaving it to the community to police itself in many regards. I have to note that there is bad behavior, but as both buyers and sellers adapt to this new model of transacting with each other, they have developed habits to protect themselves.

Craigslist is an even more extreme example. My first real experiences buying and selling over Craigslist were tentative, but I quickly became a fan. The first thing you notice is that it’s so simple to buy and sell. Either browse for what you want without any registration, or simply write your ad, upload your photograph and you’re off. You choose how you want to be contacted, there are no bidding rules and nothing is binding. Typically you meet the buyer after having negotiated over the phone or on email, in many cases they come to your home to pick up the goods. My experience was nothing more than shocking. Having sold  and bought motorcycles, guitars, electronics, furniture and household goods on CL, I have yet to have a single bad experience. I’ve never been ripped off or been misrepresented to. Never, and this experience is common (at least to the people I’ve asked about it). eBay itself records ridiculously low levels of fraud, one tenth of one percent, while other studies put it higher with broader definitions of fraud, but still they are low enough where users make wide use of these exchanges, indicating that the risk reward is favorable.

This is shocking to those who make their living based on telling us we can’t look after ourselves. But they control most of the media and virtually all of educational apparatus, so is it any surprise that after, say, a government caused financial meltdown (predicted by Austrian economics) people would look to the government for solutions? In the case of the economy, it’s even more bizarre because Keynesian economics was disproven in the late ’70s, but many still cling to it. For those of you who don’t know much about economics, the stagflation of the late ’70s isn’t a condition that the Keynesian model would allow to exist. This hasn’t dampened the current crowd’s enthusiasm in claiming its authority, howeve. Btw, a better explanation for their failure to adapt to the facts on the ground is that all they really seek is to be seen ‘doing something’ about our problems and unfortunately, the politicians don’t know enough about economics to understand how bankrupt their theories are. But I digress…

What conclusions can be drawn from these experiences and phenomena?

1. Trustworthiness is common  – People are much more trustworthy than we think, at least in our society. Even more to the point, individuals and private institutions are quite capable of optimizing all of the trade-offs involved to maximize security and trust, with no governmental involvement other than the normal enforcement of laws that preserve our security and property.

2. Cooperation is innate in us – The emails that go back and forth between buyers in these systems are instructive. Both parties inform themselves directly and indirectly about each other via overt communications and signals drawn from the interaction by the participants. The quality of the ad language, the pictures and one’s responsiveness to an email question all say something about the sellers and buyers, and new participants quickly pick up on it. How many pictures are optimal? What kind of language is attractive? All of the behaviors and communication evolve to help buyers and sellers manage their interests quite effectively, with various levels of oversight. eBay has much more structure, whereas CL is a free for all. Amazon is a third model which is really oriented as a web based storefront versus a pure auction site, and represents yet another private take on the approach. All of this evolves without any coercion from the state, and works very well. This is a key point: it doesn’t just work, it works incredibly well. If you use one of these sites, I’m sure you can attest to it. People are generally very accommodating and a pleasure to deal with.

3. Bottom up innovation works best – Both CL and eBay let their community drive how it evolves. They are fanatical about understanding what their customers want and when they develop a new feature or policy, often it is an option, not something that is uniformly imposed. Customers are free to use them if they want to. When they don’t want to, if those policies don’t work well for them, customers can go elsewhere. My experience, for example, using eBay’s auction structure is not particularly attractive for me. I also think they charge too much. Taking into consideration that I negotiate for a living, I’m much more likely to sell or buy a product on CL than eBay. But that doesn’t mean its right for everyone. The person who doesn’t trust their negotiating skills or doesn’t ever want to meet the person they’re buying from may like what eBay does (and apparently do). This is the exact opposite of how the federal government attacks problems. It coerces participation, and its instruments are rules and bureaucracies which have no chance of matching the efficiency of free exchanges, open communication, trust, price signaling and provider competition – all of which run without any supervision from government.

What is most amazing about all this is how many people go around believing that the first place we should go for solving societal problems is the government. In fact, if you look at the biggest problem areas in society, for example, education and health care, you see that these areas are flooded with governmental regulation, institutions and money. But if you look at the areas where government isn’t that active – say food distribution or personal computers, those marketplaces of individuals acting freely without coercion are working so much better. Put plainly, I can get thirty different brands of toothpaste twenty four hours a day within a fifteen minute drive from my house, and can get a laptop that has the power of a twenty year old multi-million dollar supercomputer for six hundred dollars, but still, I’m continuously met with the a priori assumption that government is the answer to our disastrous health care system.

This view simply doesn’t comport with the observable facts and it needs to be treated with incredulity by those of us who believe in free markets and free people. One of the most endearing and frustrating aspects of being human is our ability to confuse ourselves, but knowing this only places a greater burden upon us to examine our beliefs and compare them with the available facts. Sadly, I’m not at all sure most people actually want to figure things out as much as they just want their side to win.

I wonder if they know how their insistent talk of God in the poltical sphere, replete with quotes from the Bible, sounds to those of us who are not very religious or, heaven forbid, atheist? It makes them sound like exclusionary zealots – in case you don’t know. What I find most galling is the implicit message that somehow or another, Chritianity had some necessary role in being free, that somehow we wouldn’t have developed into the free superpower we are without Christianity.

The ignorance of the broader sweep of history that this position demands is nothing short of breathtaking. Let’s look at the most obvious of them, in no particular order:

1.Many immigrants to America came here because of religious persecution by various forms of Christianity in the first place.

2. Our founders were very careful to separate church and state in the formation of this country – they put it in writing. While many of them were very religious, they were not by any means looking to build a “Christian Country.” They didn’t write anything about being “God-fearing” into the Declaration of Independence or Constitution – and I think this is intentional.

3. More central is the fact that the entire idea of individual sovereignty – you know the whole idea of what it means to be free, to own oneself – was a convulsion against the very Christian idea that one is a subject of his King and God. Before this radical thought – which only came to life some 500 years ago, a person was the property of his king, tribal leader or other tyrant, as well as his God. There was no end to the depredations one or all could heap upon its people before this idea of individual sovereignty took hold.  The entire line of reasoning  that leads to the assertion of man’s natural rights was born of reason rather than faith, was found in philosopher’s writings not in the bible, and requires no belief in God to subscribe to it.

The truly pathetic aspect of this attitude is that whatever credence the Tea Party  was gaining as an alternative to the religious fundamentalists in the Republican party, it now has lost. They should look at the polls. 59% of Americans identify themselves as Fiscally Conservative and Socially liberal. These ‘Moral Majority’ types are only about 20% of the voting public and they will never be a majority, so their only home is in the Republican party.

In case people don’t understand my anger at them, these are the same people who gave us George Bush – I didn’t like them then, and I like them even less now. How ’bout you?

There are lots of problems with corporations as legal entities in our society. In my estimation, they all stem from the limited liability that a corporation enjoys, which protects owners from the consequences of corporate action. In conjunction with the agent/principal problems introduced by government created securities trading monopolies, and voila, all kinds of whacky stuff happens. This is standard Libertarian fare, the Libertarians actually have a great solution to these kinds of problems – so don’t reject us as defenders of the status quo in our crony-capitalist system. But the fundamental problems with corporations inhere to all forms of corporations, including unions and non-profits. The corporation is by no means solely a tool of the right, as so many would have you think.  A great article on Cato goes into some depth on this topic http://www.cato-at-liberty.org/2010/01/22/if-you-prick-a-corporation-does-it-not-bleed/

Here’s an excerpt:

“… we can happily declare that journalists enjoy full freedom of the press … as long as they don’t plan on using the resources of the New York Times Company or Random House or Comcast, which as mere legal fictions can be barred from using their property to circulate unpatriotic ideas. You’re free to practice your religion without interference — but if it’s an unpopular one, well, let’s hope you don’t expect to send your kids to a religious school or build a church or something, because those tend to involve incorporating. A woman’s right to choose is sacrosanct, but since  clinics and hospitals are mere corporations with no such protection, she’d better hope she knows a doctor who makes house calls. Fill in your own scenarios, it’s easy.”

This issue is really about the limits we place on government, not the status of corporations in our society and legal system. It’s a great win for free speech because is recognizes that the First Amendment to the constitution actually means something, that the federal government cannot attenuate free speech randomly. Who is doing the speaking is another legal issue.

First, it’s a simple truth that there will always be winners and losers in a free market. So one has to be careful not to get caught up in the class-warfare rhetoric our ‘dear leader’ is spewing. I would rather provide a righteous, free market reason for disgust with Goldman and its ilk, one based on a desire for free people and free markets, which is the last thing Goldman Sachs represents. Put another way, I want you to be angry for the right reasons.

My background selling derivatives trading systems and risk management systems (I actually sold AIG trading and risk management software over a 10 yr period of time – they deserve exactly what they got, btw), as well as other technologies to Wall Street had me regularly interacting with Goldman folks over the years. One thing that is absolutely clear is that they are the A team in today’s global financial markets. They hire the best and pay the best. They do things well and are amongst the smartest folks in the business. Goldman’s business is global and diversified, participating in many businesses that would surprise you. I shared a flight with a Goldman banker once and he put it this way. “Goldman will buy anything it can sell at a profit.” This reveals what is important to Goldman – profit, no matter what. It’s their mantra and their singular focus. In and of itself, there is nothing wrong with profit, which comes from pursuing one’s self interest, and it is our right to do so as free people, but there is nothing else before or after it for these guys. They are the quintessential soulless bankers, making nothing, serving no one above themselves, dedicated only to profit. They are essentially the biggest, baddest sharks in the tanks, continuously searching for their next meal. So perhaps they are just better, right, and deserve those profits by just being the best capitalists, right?

Wrong! First, Goldman engages in what is arguably the most unethical trading practice of our time, High Frequency Trading. Reliable estimates put the profit from this activity at about four billion dollars per year. Goldman is able to take advantage of its privileged position on the New York Stock Exchange (and other exchanges) to in essence, legally  front-run customer orders. Using arcane computer algorithms, they skim very minute sums trillions of times, which add up to billions for them. Other firms do this, but Goldman is the king of this practice, running 50-60 percent of program trading on the NYSE by some estimates. This is a morally reprehensible practice and adds up to a rent Goldman et al are able to collect on all firms buying and selling securities. You know, idiots like you an me, who try and pick a stock that might be a good company or pension funds, mutual funds – any market participant. Oh yeah, did I forget to mention this practice is nearly riskless for them? Nice work if you can get it, and the idiots in our government (both on the left and the right) are bamboozled by these clowns into believing that the liquidity this activity provides is a good thing for markets. One has to ask how we got along before it? Answer, just fine. In the indictment against Goldman Sachs, this is “Count 1″. In and of itself, it should be enough to fine them, sue them and perhaps even arrest some folks who work there. Besides all that legal and regulatory stuff, lets be clear about one thing that is certain. This is not free market activity: they are leveraging a privilege they are granted by government to trade securities.  In other words, the privilege they and a small number of other firms enjoy is not something any other market participant has. This is the antithesis of free markets and is much better described as crony-capitalism. I don’t blame them for doing it – they are programmed to exploit every opportunity they find. I blame our regulators for creating this opportunity for them. There is a move afoot to end it, but they are fighting it tooth and nail.

Count 2. Goldman Sachs may very well have committed securities fraud by selling mortgage related securities to investors as sound investments while its proprietary trading operations were getting rid of its mortgage exposure in every way possible. In other words – they lied to their customers. This case is foundering around right now and may never get to a courthouse, but two facts are undeniable. One, they used an offshore entity they created to deal in the mortgage markets, selling products in a way that gave them some  legal protection from fraud, which if they had done this in their U.S. subsidiaries it would be an open and shut case. This is evidence of their consciousness of guilt. Two, their proprietary activities reflected the exact opposite view. Whether it’s ultimately found to be technically illegal or not – they are scum and deserve our moral outrage.

Count 3. Backroom deals with between the Fed and AIG hedged every penny of counterparty credit risk it had with AIG in its derivatives business, which was very significant (over ten billion usd).  Goldman Sachs (and others) were protected in a way that only privileged entities in our economy are. Separately they benefited from other government interventions, but this single action insulated them from the bad decision they made in assessing AIG’s credit worthiness, giving them something from government that very few other free market participants ever have – a free ride at the expense of the tax payers. There is ample evidence that Geithner et al connived to hide these actions, and that Goldman actively sought these protections – again, they knew exactly what they were doing. This too is morally reprehensible.

I’m trying not to be overly technical here because that is a weapon that these kinds of hucksters use to bully many folks into submission while they rob us blind. You know in your gut that this is rotten business, even in if you can’t keep track of the shell game these guys play. Trust your gut, these guys are at a minimum, morally corrupt. Whether they are criminals or not is an entirely different question because that’s the way these guys play. They use different jurisdictions, legal constructs and entities to do one thing brilliantly – create profit themselves obscenely while maintaining the pretense of complying with the rules of the road. They intentionally arbitrage regulatory authorities and structures with their business model and strategies.  They are not daring capitalists, competing on some open field and winning by dint of their innovation and efficiency, no, they are rent seeking, arbitrage playing, scalping animals who should be reviled only a little less than the feckless regulators and politicians who do their bidding.

Okay, back to the fray. It’s great to see that the ignorant, independent “moderates” have actually woken up and realized that they gave a group of people with a radical ideology a majority, and that their policies may just ruin what’s left of our already weakened country. But just as they were rolled by Obama, I suspect they are now being rolled by the Republicans. I cringed as I listened to Brown’s acceptance speech last night. He really just seemed happy to be part of the Senate, to have a seat in the ‘big game’. He took time to be particularly complimentary about Ted Kennedy and trying to live up to his legacy, which immediately disqualifies him from being a sentient human being. Let’s be clear – Ted Kennedy was a drunken lecher who killed a young woman due to his irresponsibility and craven love of power. The “lion of the Senate” stuff is laughable – in fact, Ted’s rise to power reveals what is wrong with the institution itself. The Senate dispenses power based on seniority solely (not unlike a ‘union shop’), so just by being around for a while gives one power and Ted Kennedy exercised this power loudly and regularly to support many dip-shit ‘progressive’ causes such as “Head Start”, which in a recent study by the Dept of Education was shown to confer absolutely no lasting advantage on children who participate in it. The only advantage was observable in the first year of school, after that, participants were undistinguishable from non-participants.  None. Didn’t see that in the press did you?It’s only been in place for 45 years, but hey, we’ve got to give it a chance! This and many other bad welfare-state government programs are his legacy. It deserves to be criticized and dismissed, not praised by someone who supposedly opposes what Ted stood for.

What Scott Brown should have been talking about was what he will do. If he really represented those who reject the vision of the Collectivist-Utopians, what are his alternative ideas? Cut taxes, don’t proscute terrorists in court and oppose health care reform? That’s it? It’s this kind of insipid thinking by the Republicans that made me leave them. They have no big ideas, they can’t even speak up to defend free markets or the importance of individual liberty and sovereignty effectively! Don’t be fooled, he’s just another cog in the political machine of the Republicans, and if you want more of what George Bush and Tom Delay gave this country, go right ahead and cheer for him but don’t kid yourself, you are cheering for the destruction of our country – just by different means.

D o w n s i z e r – D i s p a t c h

You may copy or borrow from the following letter . . .

I’m disturbed by Congress’s behavior last year . . .

* You passed fewer laws, but they were 3 times as large
* You created 3,486 pages of new laws, whereas the nine-year average is 2,160
* Your 2009 laws averaged 28 pages, whereas the nine-year average is 10!

Longer bills are far more difficult for either Congress or the people to scrutinize and understand.

Part of the problem is combining multiple bills and subjects into one package . . . http://www.gpoaccess.gov/plaws/111publ.html

* the 407-page “stimulus” bill (Public Law 111-3) was a bundle of spending programs, handouts, tax cuts, and unrelated laws
* the 466-page Omnibus Appropriations bill (Public Law 111-5) combined 9 different federal agency spending bills into one
* the 466-page Wilderness, Interior, and Ag bill (Public Law 111-11) created scores of new laws and programs that were unrelated to each other
* the pork-laden 656-page Defense and Military Construction bill (Public Law 111-84) contained the completely-unrelated Hate Crimes Act

I believe the intentions behind such gigantic bills were to . . .

* pass unpopular bills by combining them with supposed “must-pass” legislation
* provide opportunities for logrolling, pork, and other special favors
* deny time for scrutiny by the public and by conscientious members of Congress

With more gigantic bills such as healthcare and cap & trade on the agenda, 2010 could be even worse.

But I demand that you represent me better this year . . .

* cut down on the total number of pages of legislation you pass
* whenever possible, break down large bills into smaller, understandable bills containing only one subject that must pass or fail only on its own merits
* make these objectives mandatory by introducing and passing DownsizeDC.org’s One Subject At A Time Act

END LETTER

(NOTE the length of bills cited above are not based on large-print bill pages, but on the more condensed Public Law pages. For instance, bill H.R. 2647 was 1,158 pages, but is found here as Public Law 111-84 and is 656 pages.)

You can send your letter using DownsizeDC.org’s Educate the Powerful System.

We also want to thank the following people for donating to support our work last week . . .

1-Time Contributions: Alexander Gunkel, David Ripley, Perry Sheetz, Edward Hudgens, Chelsea Moller, Richard Linchitz, plus 5 donors who asked to be unlisted

New monthly pledges: Kristina L Shull, Daniel H Fylstra, Eli Sutton, plus 1 new pledger who asked to be unlisted

Please make a contribution or start a monthly pledge using our secure online contribution form.

Jim Babka
President
DownsizeDC.org, Inc.

D o w n s i z e r – D i s p a t c h
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The triumphalism of the right-wing chattering classes over the Brown-Coakley race, exchanging knowing, insider comments about what this means for the Democrats is premature. It only means that the American people are as sick of the Democrats as they are the Republicans. This is the same country that threw them out of office over the past few years, but somehow they want to forget that.  I think it’s worth reviewing how we got to the state of affairs that put the Democrats in charge in the first place.

Only a few years ago, the Republicans held all the reins of power. Many Republicans who aren’t Bible thumping reactionaries were sickened by the likes of George Bush, his ideology and incompetence, as well as Tom Delay’s brutish political machine. We were in two wars, with both showing signs of being terribly led. In case you’ve forgotten , remember how we took over Iraq and let it sit there until a hostile power could take over and then start fighting us, costing thousands of American lives. Or how we undermanned Afghanistan, letting the conflict there stew until the Taliban could re-emerge to set up shadow governments in every province? We were running up deficits then too, with business as usual corporate cronyism running policy. Bush never questioned the Fed, and while he pushed back at Fannie and Freddie weakly, he lacked the confidence to take a stand against their recklessness and in fact backed some of it with his “ownership society”. We’d failed to capture or kill Bin Laden – I could go on, but I have hopefully jogged your memories a bit about what it was like to have Republicans running the show. It made me leave the Republican party.

In fact, one can make the case that the Republican’s failed leadership gave rise to Obama. He drew sickened moderate Republicans, independents and young people who (while mostly poorly informed) were embarrassed by George Bush, who so debased the value of being a Republican that the populist promises of Mondale and Dukakis seemed fresh and new. The best the Republicans had to offer to oppose Obama was an old crank – McCain – who’s lack of critical thinking skills made him seem like an independent thinker in the hackneyed field in which he ran. Oh, btw, who was the only candidate talking about financial ruin via the housing bubble, the criminal behavior of the Federal Reserve or the truth about the consequences of our military adventurism? Ron Paul (which Glenn Beck recently admitted he wished he’d voted for), who was roundly dismissed by the powers that be as a whack job. His silly talk of constitutional government, individual liberty and responsible government fell on deaf ears – but isn’t that what everyone is so pissed off about now?

I’m not here to promote Ron Paul. What I want to ask you to do is think about  what problems we face as a nation? If you think it’s out of control government which incessantly reaches into our lives, our wallets and our children’s wallets, do you really think that the Republicans are going to solve this problem? If you think that maybe we should re-examine our foreign policy which has our military in 130 countries, do you think the Republicans will change a thing? If you have started to realize that the Federal Reserve and our entire banking system is systemically corrupt, do you think that the Republicans will reform it? Have you been woken up by Glenn Beck to see what it really means to be free? Are you beginning to understand the revolutionary (but peaceful) change of our government that is required to actually make a difference? Remember, ACORN got a lot of money under Republicans! The Republicans have made a deal with the devil to try and hold on to small bits of power, but dare not take on the out of control monster that our Federal government has become. They don’t want to, because the thing that Beck won’t tell you is that they have built their own institutions and money machine to fund their own pet causes, that they are fine with Wall Street playing it’s rigged game, that they are in the pockets of large insurance companies who have learned to make the existing government interventions work for them and just want to go on with business as usual. They won’t admit that Fox is feeding you pablum, exciting your furies to be nothing but tools for Republican power. I mean, do you guys know who Roger Ailes is? Do you for a moment not think that he’s about supporting the Republicans?

The Tea Part movement gave me some hope last year, following that trader’s plaintive call from the exchange floor in Chicago. But now I see that Sarah Palin is going to be speaking at the Tea Party convention? Let’s call a spade a spade – she is a populist with a very poor understanding of government, economics, history and foreign affairs. Anyone who thinks she is qualified to be president has let their ideology trump their reason. Did you watch the press conference where she resigned the Governorship of Alaska? I swear, afterwards, I wasn’t actually sure she resigned. She was so bumbling and imprecise, I say this reveals her weak mind. Did you see her admit on Fox this week that up until being briefed for the Vice Presidential debates, she thought that Saddam Hussein was likely involved somehow in the Al Qaeda attacks on 9/11? Do you have any idea how ignorant that is? Btw, she basically admitted recently that she believes she’s on a mission from God! Maybe that makes the evangelicals out there happy, but those of you who don’t think that teaching intelligent design as an valid alternative to evolution is a good idea should exit the doors of the Tea Party movement immediately.

No, this is the canary in the mine shaft for the Tea Party movement. They have been fully co-opted by the right wing fundamentalists of the Republican party. If you vote these guys in again, our country will still go down the tubes – just a little bit slower, that’s all. Those of you who are concerned should stop falling for the Republicans games – they don’t care about you, they only want the power back.

There is a real alternative out there – the Libertarians! I know, Rush Limbaugh is telling you that a third party is bad for the cause, but I say this is the only chance we’ll have. If enough people support Libertarians, we have a real chance of pulling people from the left and right by the time the next presidential election comes round. There is a Libertarian running in Mass, his name is Joe Kennedy (no relation to the drunken killer, Ted Kennedy, may he burn in hell). He polls at 3 percent, which is a miracle in and of itself, given his meager resources. The Libertarian Party is working very hard to put up viable candidates all across the country – so take a minute, look at what they stand for and ask yourself, which candidate has the best chance of dealing with the problems as you see them? Stop, think – Libertarianism is what it really means to be conservative anyway.

Ronald Reagan said it best: “If you analyze it I believe the very heart and soul of conservatism is libertarianism. I think conservatism is really a misnomer just as liberalism is a misnomer for the liberals–if we were back in the days of the Revolution, so-called conservatives today would be the Liberals and the liberals would be the Tories. The basis of conservatism is a desire for less government interference or less centralized authority or more individual freedom and this is a pretty general description also of what libertarianism is.”