A Qualified Defense of CNN
So everybody is laughing at CNN, and I did too (on Facebook), because they initially reported that the Supreme Court had thrown out the individual mandate. But actually, their mistake is very understandable. If you look at the actual ruling, it’s over 60 pages long. Obviously news organizations aren’t going to parse the whole thing, they’re going to skim it to see what the “big picture” is and report that right away.
So, if you actually start reading this thing from the beginning, this is what you see, with my bolding (and this is all on the first two and a quarter pages, I’m just taking out some boring stuff):
NATIONAL FEDERATION OF INDEPENDENT BUSINESS ET AL. v. SEBELIUS, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
No. 11–393. Argued March 26, 27, 28, 2012—Decided June 28, 2012*
In 2010, Congress enacted the Patient Protection and Affordable Care Act in order to increase the number of Americans covered by health insurance and decrease the cost of health care. One key provision is the individual mandate, which requires most Americans to maintain “minimum essential” health insurance coverage….2 NATIONAL FEDERATION OF INDEPENDENT BUSINESS v. SEBELIUS
…
Held: The judgment is affirmed in part and reversed in part.
648 F. 3d 1235, affirmed in part and reversed in part. 1. CHIEF JUSTICE ROBERTS delivered the opinion of the Court …2. CHIEF JUSTICE ROBERTS concluded in Part III–A that the individual mandate is not a valid exercise of Congress’s power under the Commerce Clause and the Necessary and Proper Clause. Pp. 16–30.
(a) The Constitution grants Congress the power to “regulate Commerce.” Art. I, §8, cl. 3 (emphasis added). The power to regulate commerce presupposes the existence of commercial activity to be regulated. This Court’s precedent reflects this understanding: As expansive as this Court’s cases construing the scope of the commerce power have been, they uniformly describe the power as reaching “activity.” E.g., United States v. Lopez, 514 U. S. 549, 560. The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce.
Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority.
For anyone who actually believes the 5th grade version of the “checks and balances” in our government, the above should have been definitive. First, the ruling explicitly said that some parts of the Act earlier ruling were held and some were not, and second, it went on to say the individual mandate was not a valid exercise of the Congress’ power. It was entirely understandable that CNN went to town based on the above.
To drive home the point (as many are saying), what if the federal government said, “We’re not interfering with abortion or a woman’s right to choose, but the IRS will increase your tax bill by $50,000 if you get an abortion.”
My Time at Porcfest 2012
On Sunday I returned from five days in Lancaster, NH at “Porcfest,” short for the Porcupine Freedom Festival. (The porcupine is the mascot, because it doesn’t attack but can ably defend itself.) My first experience was at Porcfest 2011, where I had a blast, and once again Porcfest 2012 turned out to be my favorite week of the year. In this article I’ll explain why I now save up my vacation for this event, and why it’s relevant to everyone who loves liberty.
The first thing to say about Porcfest is that it’s a lot of fun. Now admittedly, some of this comes from the fact that there are plenty of libertarians who are “Friends” on Facebook, and they only get to meet at events like this. But beyond that, it is undeniably true that Porcfest differs from most other official liberty events, because it is located at a campground. It started out as a simple gathering of liberty-minded individuals who wanted to camp and talk about these issues, and kept growing over the years so that now its total attendance in a given year breaks 1,000.
I have described Porcfest as “Woodstock for libertarians” only half in jest. There really are bands, all of whom support liberty and several of whom play music specifically in that vein (such as Jordan Page with his Ron Paul-themed songs). And where else would I have the opportunity to say this?
Yet Porcfest is more than a week-long party. As the crowds have grown, it’s made sense for the organizers to bring in speakers. For example, last year I spoke on the possibility of Stateless legal systems, while this year I was on one panel discussing Austrian Economics and gave a separate talk on what money and banking would look like in an unregulated market. This year also featured talks from economists Ben Powell on the economic analysis of sweatshops, and Dan D’Amico on prison privatization.
There’s something more, though, that conveys just how unique Porcfest is. To understand this aspect, you need to realize that Porcfest is an offshoot of the Free State Project (FSP), which has the slogan, “Liberty in our lifetime.” The FSP has chosen New Hampshire as its target site, and encourages the mobile and liberty-minded to move to the state. (Currently 1,039 people have moved to New Hampshire under the auspices of the FSP.)
Although some view the FSP as an effort to implement small government at the local level (through concentrating libertarian voters in a small geographical area), the broader goal is simply to immerse oneself in a community of people who believe that voluntary social arrangements are preferable to coercive ones. Although they know they are still beholden to the claims of the federal government, the participants in the FSP try to deal with each other through peaceful means, turning to arbitration brokered by other Free Staters rather than the police when problems arise.
Within this context, we can now talk about some of the other events at a typical Porcfest. In addition to the speeches on academic, theoretical topics, there are also very practical panels telling people how to find a job and an apartment if they move to New Hampshire, how to homeschool one’s children without running afoul of state laws, and how to navigate the legal system if one wants to engage in activism (such as protesting outside City Hall, handing out leaflets at the airport decrying the TSA, etc.).
It is because Porcfest is composed of hundreds of people who are living out their professed lifestyle, that I was so taken with the event last year. As I walked out of an event on homeschooling, I saw food vendors who accepted silver and Bitcoin, as well as U.S. dollars (or “FRNs”—Federal Reserve Notes—as the Porcfest attendees disparagingly call them). At the same time, there were dozens, perhaps hundreds, of people openly carrying guns and large knives, yet everyone felt perfectly safe. Indeed, many parents bring young children to Porcfest, where there are fun events designed especially for them. At other libertarian conferences, you can hear speeches on what a free society might look like, but at Porcfest, you see it—at least a glimpse—with your own eyes. Even though my entire career has focused on the study and advocacy of a society based on voluntary relations, I myself believed in the vision more, after visiting Porcfest in 2011.
The event is certainly not for everyone—I imagine many social conservatives would feel uncomfortable—and the Free State Project is obviously not the long-term solution to an overbearing government: We can’t all move to New Hampshire. Even so, I am a strong supporter of what the people in the FSP are doing, because they provide a real-world model of how libertarianism could work. Moreover, as any free market economist knows, as more minds are incorporated into a project, the more likely it is that great ideas will emerge.
For example, last year I became hooked on one vendor’s signature dish called a “Thai-rrito,” a Thai version of a burrito that consists of chicken curry and rice, rolled into a flour tortilla. Someone told me that at PorcFest 2010 the vendor had realized that people didn’t want to sit down with a plate to eat their curry — they had friends’ campers to visit and beer to drink! So the Thai-rrito, which could easily be eaten while walking, was developed in response to the needs of the consumer.
For a more significant development, I ran into some guys who had laminated a business card containing a U.S. pre-1964 dime. On the back of the card was a table showing how much silver such dimes and quarters contain, and what their market value was when silver was $30/oz. This technique allows people to easily engage in commerce using silver, but with little risk of the government cracking down on the operation. After all, how can the feds object if people are buying things with official U.S. coins?
Those who desire more freedom have adopted many different strategies to achieve their goals. Although it can’t be the only technique, the plan of the Free Staters is worthwhile. In any event, adventurous liberty lovers should check out Porcfest 2013!
Bask on Norwegian Oil Fund
I know Free Advice is a global behemoth, with readers from every continent. Therefore, someone please save me a lot of time, by telling me where I need to go to find out the basic policies of Norway’s oil fund (its old name). This is a special fund that takes in revenue from petroleum sales, in order to buy other assets and ensure that future Norwegians partake in the delights of today’s mineral deposits.
For example, with Alaska’s Permanent Fund I have tons of info right here. So what is the analog for Norway, or do I have to learn a second language?
The Dangers of the Modern Greenbacker Movement
Uh oh, I ask for a comeuppance by the MMTers in this new piece at The American Conservative:
Lately there has been growing interest in what might be called the modern Greenbacker movement, in homage to the historical political party. The new movement deplores the current system under which the government issues interest-bearing debt to commercial and central banks. Instead, the modern Greenbackers want the government to create new fiat money directly to cover its fiscal deficit. The movement has backing from mature authors as well as glib 12-year-olds. But there are dangers in this approach — it could be a cure worse than the disease.
BTW I know that Gary North has written extensively on this topic, but I was on a deadline and didn’t have time to sift through his critiques to properly cite him. But hey, here ya go, if you want to see an example of what I mean.
Tom Woods on the Libertarian Moocher
The historian strikes back. (Incidentally, Tom charged me $1000 to host this video at Free Advice, so if you want to bake me a pie or something, I would appreciate it.)
Paul Krugman: “We Have Always Been at War With a Bloated Housing Sector”
Usually I’m pretty good at seeing how Krugman isn’t actually contradicting himself, but instead is engaging in mere Kontradiction–where he twists the dials on something that could plausibly go either way, in order to always come down on the side of more government activism on an issue. It’s not that his decision to turn the dial one way or the other is outrageous on any given issue, but rather that his calibration of the dials isn’t random, or guided by how he actually feels on the issue–it matters where it will lead him on that particular policy issue, for that particular blog post.
But with this one, even I am stumped. Let’s set the context: For years now, Krugman has been blasting the people who have argued that this recession is caused by a need to reallocate resources from one sector to another. Very recently, I wrote a full-blown response at Mises.org, trying to show Krugman that yes indeed, the construction sector was shrinking more than manufacturing and services. This was necessary, because Krugman had tried to show that the declines were across the board: According to Krugman, the problem was a general lack of Aggregate Demand; this had nothing to do with sectoral imbalances, the way Arnold Kling or the Austrians were claiming.
Okay, now let’s change the subject. Suppose we stop talking about the recession per se, and instead talk about optimum currency area and why the Very Serious People are idiots about the euro, and Krugman (as always) has been right all along. In this case, here’s how Krugman describes our current crisis:
The disadvantages of a single currency come from loss of flexibility. It’s not just that a currency area is limited to a one-size-fits-all monetary policy; even more important is the loss of a mechanism for adjustment. For it seemed to the creators of OCA, and continues to seem now, that changes in relative prices and wages are much more easily made via currency depreciation than by renegotiating individual contracts….
But why should such adjustments ever be necessary? The answer is “asymmetric shocks”. A boom or slump everywhere in a currency area poses no special problems. But suppose, to take a not at all hypothetical example, that a vast housing boom leads to full employment and rising wages in part, but only part, of a currency area, then goes bust. The legacy of those boomtime wage increases will be an uncompetitive tradable sector, and hence the need to get at least relative wages down again.
So how do we reconcile this? Is Krugman saying that the housing boom led to rising wages in concentrated pockets of Europe, but not in concentrated pockets of the United States?
Note well, when discussing the Austrian diagnosis of the United States, Krugman (to my knowledge) has never said, “Yes, the Austrians are right that relative wages need to fall in construction and housing in particular, and that workers need to flow out of states like Nevada and into other areas of the country that didn’t boom so much during the good years. However, their recommended solution is just too painful; I have a better way to fix the problem that they’ve correctly diagnosed.”
No, Krugman has repeatedly said, “The Austrians are crazy. The data don’t show any disproportionate impact from housing at all. Unemployment isn’t higher in the housing boom states, and wages aren’t changing at different rates in construction versus other industries.”
(Of course I’m paraphrasing in the above, but that is definitely what he’s been saying. Go to my article linked above, and follow the links if you don’t believe me.)
So, did Europe have a totally different experience during the housing boom during the mid-2000s than the US did? Or, did Krugman have no problem citing the obvious impact of the housing boom on relative wages and sectoral resource flows, when he was discussing optimum currency area, and there was no obvious stimulus spending at stake?
Reminder: Anatomy of the Fed Starts Tonight
A quick reminder, my Mises Academy online class “Anatomy of the Fed” starts tonight. Special summer pricing: $79 for an 8-week course. Krugman is right, deflation is here.
There Are Christian Anarchists
This is going to be a brief post since I have been traveling all day, coming back from Porcfest (which was awesome, by the way, but more on that as the video becomes available).
Anyway, while at Porcfest I was chatting with an economics colleague, and she said that someone at dinner was stunned to learn that she was both a Christian and not a fan of the State. Now I don’t know if this particular colleague calls herself an anarchist, but she for sure is against drug prohibition and the U.S. government’s foreign wars, and at the very least she is very familiar with, and sympathetic to, the writings of people like Murray Rothbard and David Friedman on free-market anarchy.
(Now even though I wrote a pamphlet in grad school sketching a vision of how a free market could handle the provision of judicial and defense services, I don’t call myself an “anarchist” anymore. However, that is mostly me being pedantic, and wanting to distinguish myself from a lot of self-described anarchists who feel that authority per se is bad, and don’t like “anyone telling me what to do.” Since I worship and follow King Jesus, it seems weird for me to call myself an anarchist on that score.)
But back to the main point: I actually think evangelical Christians are a ripe demographic for understanding the ideal of a Stateless society. God warned the Israelites not to submit to an earthly king, and His warnings were spot-on. Indeed, for those of you who are skeptical of my claim here, skim (or better yet, read carefully) this page. I found it just by googling “god warns against king” and this was the top hit that had a URL suggesting to me it was written by someone who actually believes this stuff.
Notice that it’s not merely God warning the Israelites that the king will lay heavy burdens on them, taking their sons into war, etc. It also explains how Israel was “governed” before kings, via judges. Check this out:
c. What was the difference between a king and a judge? A judge was a leader raised up by God, usually to meet a specific need in a time of crisis. When the crisis was over, usually the judge just went back to doing what he was doing before. A king not only held his office as king as long as he lived; he also passed his throne down to his descendants.
i. In addition, a judge would not have a “government.” He was there to meet a specific need in a time of crisis. A king would establish a standing government, with a bureaucracy, which is both a blessing and a curse to any people.
ii. In Judges 8, Gideon was offered the throne over Israel. He refused it, saying “I will not rule over you, nor shall my son rule over you; the LORD shall rule over you.” (Judges 8:23) This was the heart of all the judges, and why Israel went some 400 years in the Promised Land without a king.
Now I need to be honest, the guy who wrote the above almost certainly is NOT an advocate of dissolving the coercive State apparatus. He earlier argues that there was nothing wrong with wanting a king per se. (I think he is overreaching on that point, but I’m not going to go into that now.) At the very least, though, you can see how Bible-believing Christians don’t need to look to Iceland for an idea of how a Stateless world could work.
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