Voter ID

"Define irony."

--Garland Greene (Con Air)

Liberty-minded people are naturally wary of government-mandated ID requirements. Mandatory identification cards, tags, numbers, implants, retinal scans, fingerprints, etc. invite government tracking which threatens individuals' constitutional right to privacy. When it cannot identify and monitor behavior, the state loses much of its power for meddling in the affairs of the citizenry. 

It would seem that the lower the requirement for state-sponsored ID in a society, the greater the individual liberty in that society.

However, this proposition poses a dilemma when it comes to voting. Free societies are usually grounded in republican forms of government. In republican forms of government, representatives are commonly elected by the citizenry through some form of popular vote. 

A few rules are typically imposed on the voters. They must be of a minimum age. They can cast only one ballot. They cannot vote in proxy for someone else. Finally, they must be recognized citizens of the geographic domain for which votes are to be cast. 

It follows, then, that there needs to be a process for verifying that voters have adhered to the rules. It is also difficult to see how such a process does not include a reliable form of voter identification. Information on the ID enables verification of a prospective voter's eligibility and that voters have been true to the 'one person, one vote' requirement.

Wouldn't mandatory voter ID increase risk of government mischief? Oh yeah. The classic precedent is the Social Security number. When the Social Security program was enacted in the late 1930s, the number was said to be simple mechanism for tracking accounts in the Social Security system. Since then, of course, the SSN has become a principal identifier for individuals within the US.

But perhaps the risk can be intelligently managed. After all, absent voter ID, election integrity seems impossible to verify. Corruption is encouraged. Individual voting franchises are degraded. Electors are illegitimate. (Sound familiar?)

Consequently, governments may be installed that threaten the very liberty that free people seek to protect by remaining anonymous and untrackable. 

Quite the irony.

Noble Lies

Col Nathan R. Jessep: You want answers?
Lt Daniel Kaffey: I want the truth!
Col Nathan R. Jessep: You can't handle the truth!
--A Few Good Men

Victor Davis Hanson discusses Plato's notion of the 'noble lie', i.e., belief that it is acceptable for public officials to lie to citizens when it is for the common good, in the context of the myriad examples we have witnessed recently.

We know that, to politicians, honesty is rarely considered best policy. But it is a folly of rationalization to believe that lying is in the public interest. 

Courting Michigan

"I'm just a humble country lawyer trying to do the best I can against this brilliant prosecutor from the city of Lansing."
--Paul Biegler (Anatomy of a Murder)

Add Michigan to the list of states taking judicial action to upend government by edict. Looking forward to more state legislatures getting back in session. When legislatures deliberate and discuss issues from various perspectives, then they more accurately represent the people than does a dictatorial governor.

Use the courts to get states back into the hands of legislatures. Into the hands of the people. Back to being a republic.

Impeachment and Political Risk

"You're all committing suicide!"
--Lou Zabel (Wall Street: Money Never Sleeps)

There are competing arguments about the long term consequences of the impeachment circus staged by House Democrats. One argument is that the Democrat's abuse of the impeachment process threatens the Constitution and sets up future presidents for similar partisan impeachment votes over petty issues.

The open ended criteria for impeachment proposed by the Democratic experts are dangerous and place Congress above the law. That’s why the Framers demanded specific criteria that sound of crime, rather than “abuse of office.”

— Alan Dershowitz (@AlanDersh) December 4, 2019

Another argument is that voters will see thru the sham for what it is, and rally behind those falsely accused. The backfire will scare future congresses from invoking impeachment for years.

Some say this impeachment sets a new low and every president from now on will face an impeachment vote over something petty.

But if Trump wins re-election and/or Republicans take back the House, it could be 2 or 3 decades before another congress does something this partisan.

— Thomas Massie (@RepThomasMassie) December 18, 2019

These pages have already suggested merit in the second argument.

Perhaps our founding ancestors understood the political risk of such recklessness as well.

Impeachment Partisanship

Here comes the rain again
Falling on my head like a memory
Falling on my head like a new emotion
--Eurythmics

Alan Dershowitz discusses the Constitutional basis of impeachment and the debates of our founding ancestors about the issue. To be impeached, a president must commit a crime, and the commission of that crime must also constitute an abuse of office. Abuse of office by itself may be wrong, but it is not an impeachable offense.

The basis for impeachment was debated at the Constitutional Convention. When simply 'maladminstration' was proposed as grounds for impeachment, James Madison objected, arguing that the criterion was so vague and open-ended that the president would serve at the will of Congress and turn the federal government into a parliamentary democracy where the president could be removed with a vote of no confidence.

Instead, the framers adopted strict requirements for impeachment. Bribery, treason, or other high crimes and misdemeanors must be evident. A 2/3 super-majority vote in the Senate is required for removal.

In Federalist 65, Alexander Hamilton wrote of the dangers of a partisan approach to impeachment. Dershowitz suggests that the recent House impeachment circus demonstrates the partisan approach well. He suggests that impeachment partisanship further divides the nation and threatens to weaken the Constitution.

Perhaps, but the framers might also suggest that a partisan approach to impeachment is also likely to boomerang the party that goes on a unilateral witch hunt for all to see.

Living the Deep State

"Listen, people, everyone knows where this is going. If this was a legit op, and I can't imagine how it could be, then so be it. But if this was someone's unilateral wet dream, then that someone is going to prison."
--Admiral Shaffer (Enemy of the State)

Meadows is correct. The chorus of bureaucrats testifying at the impeachment circus demonstrate the officials in various federal agencies are behaving as if they set foreign policy. This, of course, is not their job.

Unelected bureaucrats in Washington, D.C. work for the President.

Not the other way around. https://t.co/f840sN9CH6

— Oversight Committee Republicans (@GOPoversight) November 21, 2019

Their job is to execute foreign policy set by the president.

When unelected agency bureaucrats go off the reservation and act unilaterally on policy matters, they are living the Deep State.

Political Scandal

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Hamilton's Play

"I've been played like a grand piano by the master, Gekko the Great."
--Bud Fox (Wall Street)

In late July of 1789, the state of New York held its constitutional convention. Ratification by New York was not necessary for the United States to come into being, as the Constitution had already been approved by ten states by the time New York representative met. Only nine 'yes' votes were required.

Instead, the state convention essentially became a referendum on whether New York would join the union.

There was opposition. Drawing from the Antifederalist argument, many worried that the central government would grow too big and powerful, thereby marginalizing state sovereignty.

Nonsense, said one of the greatest proponents of strong central government--New York's own Alexander Hamilton. The co-author of the Federalist Papers addressed the convention:

"Gentlemen indulge too many unreasonable apprehensions of danger to the State governments. They seem to suppose that the moment you put men into a national council, they become corrupt and tyrannical and lose all their affection for their fellow citizens. But can we imagine that the Senators will ever be so insensible of their own advantage as to sacrifice the genuine interest of their constituents?"

The Antifederalists certainly imagined it. And it is difficult to argue with the prescience of their vision.

It is also difficult not to surmise that Hamilton was being at least a tad disingenuous with his esteemed colleagues at the state convention. After all, the ink was barely dry after the state signing before he began arguing that the Constitution contained implied powers that granted the federal government greater authority over the states. Post Constitution, Hamilton became perhaps the most vocal proponent of strong central government.

Did the delegates at the New York ratification convention realize that they were being played?

Change the Rules

Now did you read the news today
They say the danger's gone away
But I can see the fire's still alight
There burning into the night
--Genesis

Over the past week or so, various Democrats have proposed or voiced support for the following:

-->Abolishing the Electoral College in favor of a 'national popular vote' for electing the president.

-->Packing the Supreme Court with additional judges.

-->Lowering the legal voting age to 16.

Demonstrating, once again, that when a political party has trouble competing under the rules set forth by our Constitutional framework, then it prefers not to endeavor to become more competitive under those rules.

Rather, it endeavors to change the rules.

Electoral College Nonsense

'Cause you've got to blame someone
For your own confusion
We're on guard this time
Against your final solution
--Red Ryder

As progressivism was gaining traction a century ago, leaders of the movement such as Woodrow Wilson dismissed the Constitution as out of date. We needed a new, more modern governing design that kept up with the times, so went the argument.

Because this approach consequently didn't resonate with many Americans, progressives have since then been searching for more compelling rationales for overthrowing the governing framework developed by our founding ancestors.

The rationale du jour is that the founding design is steeped in the all too familiar ad hominem cry of the left: racism and slavery. Among the current targets of this weak form of argument is the electoral college. Progressives, of course, are upset with this approach for electing presidents because several of their candidates lost elections while winning the popular vote.

Tara Ross presents the progressive argument that the electoral college is an 'antiquated relic of slavery' and a 'pro-slavery compromise,' and then demolishes the it with evidence to the contrary.

Of course, anyone who has completed junior high civics should already know this. The United States was not founded as a democracy, but as a federal republic. Because the founders clearly understood the dangers of majority rule--particularly in a 'union of states' such as the United States--they designed the electoral college as a means for reducing dominance of big states over small.

Ross cites one of the many of the anti-slavery delegates to the constitutional convention, Gunning Bedford of Delaware, who said that the small states simply feared that they would be outvoted time and again by the large states. The electoral college can be seen as a device for coping with those fears.

The division between small and large states was the greatest difference that needed to be overcome at the convention in order to obtain agreement on a 'union of states.'

Theory and history work against progressives, who would much rather erase both in favor of nonsense.

Interstate Policy Competition

Don't care about pollution
I'm an air-conditioned gypsy
That's my solution
Watch the police and the tax man miss me
I'm mobile!
--The Who

One of the many beneficial features of the federalist system created by our founding ancestors is that it promotes policy competition among the states. If, for example, a particular state places high tax burdens on its citizens, then people can 'vote with their feet' by leaving the state in favor of lower tax regimes.

Data presented by Dan Mitchell suggest people are doing just that. Individuals are moving from states with oppressive policies such as California, New York, Illinois, and New Jersey to states like Florida, North Carolina, Utah, and Texas that offer more liberty.

One recent study of state household taxes (income, sales, property taxes) and domestic migration rates finds a significant negative relationship, i.e., the higher the state household taxes, the lower the level of migration into that state, as expected.

Mitchell does note one potentially undesirable consequence of these domestic migration patterns. Migrants coming from oppressive policy states might bring their political attitudes with them, which subsequently might lead them to support the same policies that ruined the states that they left. Recent political developments in Colorado, which has been a destination state for many fleeing high tax  regimes, is offered as an example.

An interesting point, but a design that supports ongoing interstate policy competition is likely to erode political attitudes that lead to oppressive policies over time.

Miseducation About Democracy

If looks could kill
They probably will
In games without frontiers
War without tears
--Peter Gabriel

These pages have observed that one mechanism for leftists to cope with the cognitive dissonance associated with Donald Trump's election as president is to claim that his victory was illegitimate since he did not win the popular vote. An intuitive extension of this delusion is to call for an end to the Electoral College. Many leftists are making such a call.

To the extent that some Americans might view subjecting presidential elections to a national popular vote, Prof Williams suggests that miseducation by the school systems is a primary culprit. This miseducation begins with the premise that the United States was founded as a democracy. As these pages have frequently observed, Prof Williams notes that the United States was founded as a federal republic, not a democracy. The word 'democracy' does not appear in either the Declaration or the Constitution. He includes classic quotes from Madison, Randolph, Adams, and Hamilton all voicing contempt for democratic designs.

Williams goes on to discuss the Electoral College as device for upholding a republican form of government and for breaking the grip of majority rule votes in presidential elections.

That few people can coherently explain our founding ancestors' logic against democracy and their corresponding efforts to thwart it constitutes ignorance of fundamental civics--miseducation that leftists seek to exploit today.

Agency, Distance, and Subsidiarity

You took advantage of my trust in you
When I was so far away
--The Who

Conditions for agency problems arise whenever people ("principals") contract with other people ("agents") to represent them and in particular to make decisions for them. Celebrities hire agents, owners of companies hire managers, citizens hire government officials, etc.

Because people are axiomatically self-interested, agents are prone to make decisions in their own best interest rather than in the best interest of their principals. For example, agents might pad expense accounts or hire friends rather than the most qualified personnel as subcontractors.

Principals can reduce agency problems by monitoring agent behavior. Obstacles, however, impair effective monitoring. Technically, the specialized skills may be difficult for principles to accurately assess, as in the case of senior managers deciding on which corporate computer operating system to select. Moreover, the 'goodness' of agent behavior may not be immediately evident, as in the case of investment decisions made by a financial advisor. Such impediments, of course, call into question how principals can intelligently select agents to appropriately represent them in the first place.

In many cases, however, monitoring is limited by time--i.e., time that principals have available or are willing to allocate for monitoring agents. Indeed, principles often hire agents so that they free more time for other things. If they spend all their time monitoring agent behavior, then principals have defeated the purpose of hiring agents to begin with. Stated differently, all of their monitoring makes them less free.

The burden of monitoring can be reduced by closing the distance between principal and agent. Locality makes it easier for principals to monitor agent behavior without wasting time. Moreover, the mere prospect that principals are in the neighborhood reduces agency problems. When agents sense that principals are close by and may at any time be watching, then those agents are less prone to mischief.

This was an important reason why the anti-federalists and many of the founders, including Jefferson, weighted decentralization and the principle of subsidiarity so highly. Agency problems, i.e., the costs of freedom, are reduced as distance closes between citizens and government.

Palace Revolution

Everywhere I hear the sound of marching charging feet, boy
--The Rolling Stones

With Donald Trump's win last night in Indiana and Ted Cruz's subsequent drop from the race, it appears highly likely we are headed for another authoritarian president--whether the next elect be Republican or Democrat. While there is an argument to be made that the present disarray in the two mainline political parties is a long term positive, I have my doubts that the republic will be able to withstand another statist regime.

By definition, extreme events are low probability affairs--at least in the near term. However, that should not discourage vigilance in keeping an eye out for factors that might spawn such 'tail risk.'

As I see it, yesterday's development in the presidential race adds one more factor to an already growing list that increases the likelihood for a major socioeconomic meltdown over the next four years. This is not a prediction. I am merely saying that the chances of an extremely negative scenario unfolding have gone up significantly in my mind's eye.

In the spirit of scenario planning, I intend to manage this risk accordingly.

Sweeping NSA Surveillance

"Careful, chief. Dig up the past, all you get is dirty."
--Lycon (Minority Report)

What would a week be without a new scandal surfacing about this administration? The scandal du jour is two massive NSA surveillance projects. One involves forcing Verizon (VZ), and likely other phone carriers, to hand over phone records of all its customers. The other involves a program that scours major Internet companies like Google (GOOG) and Facebook (FB) for data.

Once again, US mainstream media did not break this story. Instead, a reporter for the UK Guardian took the lead. This now makes at least five page one headline stories that Big Media in the US has whiffed on.

Yet, what could be a bigger story than a government that is hellbent on shredding the Constitution by violating people's rights on such a massive scale? This is the stuff of dictatorships, not republics.

As Judge Nap observes, the president, attorney general, and the judge who signed an open ended warrant are so blind to liberty that they are unworthy of their offices.

Many supporters of this administration are suggesting that Obama somehow does not own this problem because the Patriot Act was enacted under the Bush Administration. It's the juvenile 'He started it" argument that kids use to justify bad behavior on the playground.

We have said it before. If you inherit bad policy, you do not perpetuate or escalate it. You remove it.

no positions

Charade of Independence

"Everyone's trying to get out of Washington, and we're the only schmucks trying to get in."
--Julius Levinson (Independence Day)

John Mauldin opines that we likely won't see Weimar-style hyperinflation in the US because the 'independence' of the Federal Reserve from government reduces the chance that bureaucrats will be willing to destroy the currency in order to pay down debt.

Fed governors have families and communities like the rest of us, JM, reasons. Thus they will be reluctant to turn the dollar to confetti for political gain.

Perhaps we will not get Weimar-like hyperinflation. But if we don't, it will not be because of the Fed's celebrated independence.

It is a charade to view the Fed as an independant agency. The Fed chair is appointed by the president and routinely meets with and reports to politicians in Washington. Moreover, the Fed reflects a type of government structure that is the enemy of a republic, one shared by most of the agencies that report to the president. These people are appointed rather than elected, yet have direct responsibility for developing and implementing policy.

No matter how poorly these bureaucrats do their job, voters cannot 'vote the rascals out. This amounts to oligarchy rather than republic.

Ask youself this question. If the Fed was a truly an indepedent agency, then who does this agency work for? Precisely whose interests do the actions of the Fed protect? Where do the Fed's resources come from? Who is the Fed accountable to?

Check the evidence. Since the Fed's creation, the dollar has lost about 98% of its purchasing power (in the 100 yrs prior to the Fed's creation, the dollar actually strengthened). Easy credit offered by the Fed has driven massive debt and leveraged speculation.

Now, as the artificially inflated mountain of credit begins tumbling down, the Fed's actions get more extreme. Short rates effectively at zero. Monetizing debt by buying $trillions in govt and private debt securities.

If things don't turn around, is it reasonable to believe that the Fed will pack their toolbox and go home? Or, given the trajectory toward increasingly extreme action, will the Fed dig deep into the box for tools of desperation (a la Weimar)?

Were the US Treasury in charge of monetary policy, it is difficult to imagine that Treasury would be acting any more recklessly that the Federal Reserve.

position in USD, SPX

Locking Out the Republic

Just a little more time is all we're asking for
Just a little more time can open closing doors
--Corey Hart

The video here contains some interesting comments on what may be the unconstitutional nature of the 'Super Congress' being formed as part of the newly inked debt deal.

The basic argument stems from the notion that all representatives are constitutionally authorized to be involved in the legislative process. Barring elected representatives from full involvement in the process, including debate and proposing amendments, equates to disenfranchising the voters who elected those representatives.

In such case, the governing design would no longer reflect a republic.

Excluded representatives could rightly sue to regain entry into the process. The judge said the he knew of at least a half a dozen senators at minimum likely willing to take such action.

Will be watching to see how this unfolds...

Deceptive Democracy

You tell me it's the institution
Well you know
You better free your mind instead
--The Beatles

The United States was founded as a federal republic. 'Federal' refers to a form of government in which a group of states or regions defers some power to a central authority while maintaining a measure of autonomy. 'Republic' refers to a form of government in which power is explicitly vested in the people, who in turn exercise their power through elected representatives.

Today many refer to our form of government as a democracy. Among the modern definitions of 'democracy' is this one: a system of government where the power is vested in the people, who rule either directly or through freely elected representatives. This meaning of democracy overlaps considerably with the definition of a republic, which seems to justify interchanging the two terms.

However, democracy has another meaning--one that has been held for a much longer period of time. Democracy also refers to a decision-making process where decisions are made by majority rule.

Decision by majority rule was not the intention of the Founders. We know this for a number of reasons. The word 'democracy' does not appear in any of the nation's founding documents, including both federal and state constitutions--although the concept of decision by majority rule was alive and well back then. Indeed, many Founders were on the record for their distaste of democracy. The republic design reflects this distaste. If democratic decision-making was intended, then why designate representatives when majority vote directly by the people would determine the outcome of an issue?

A primary problem with majority rule is that it discriminates against minority interests. If all decisions are to be decided by democratic vote, then any dominant coalition can, well, dominate. Essentially, majority rule does not facilitate equal treatment under the law. It is more likely to foster both predatory wealth and predatory poverty.

The Founders knew that equal treatment under the law required decisions grounded in the rule of law. Borrowing ideas expressed nearly one hundred years earlier, John Adams in 1774 wrote about 'a government of laws and not of men.' Decisions guided by principled law are likely to endure fashions of the day, emotions that distort perspective, and self-interest that drives human behavior.

Today, it seems clear that people have substituted democratic process in place of the rule of law. Obvious 'proof' in this regard is the size and intensity of the lobbying industry and the affiliated special interest groups. There would be very little market for SIGs in a system grounded in a principled rule of law.

Migration toward demcracy and its consequences as been discussed by many over the yrs (e.g., here, here, here). Toqueville and Hayek suggested that democratic societies had capacity to destroy themselves.

There is an argument to be made that democratic process is being misapplied in this country--perhaps because many people are condoning a process that they mistakenly identify with the country's founding.

Escalating debate of such a proposition seems a good thing--even if only to raise civic awareness.

Jury Duty

"It's always difficult to keep personal prejudice out of a thing like this. And wherever you run into it, prejudice always obscures the truth. I don't really know what the truth is. I don't suppose anybody will ever really know. Nine of us now seem to feel that the defendant is innocent, but we're just gambling on probabilities--we may be wrong. We may be trying to let a guilty man go free, I don't know. Nobody really can. But we have a reasonable doubt, and that's something that's very valuable in our system. No jury can declare a man guilty unless it's SURE."
--Juror #8 (12 Anrgy Men)

A couple of nites back I watched the classic film 12 Angry Men. Henry Fonda plays a juror who, unlike his eleven peers, does not believe that a murder verdict is a slam dunk in their particular case. Instead, he argues that the accused has a right to equal treatment under the law, and that members of the jury, despite their biases, are responsible for carefully considering the evidence vis a vis the law.

One premise that grounds our legal system is that an individual is innocent until proven guilty. The accused is not required to say a word in his/her behalf. Instead, it is the responsibility of the prosecution to make the case.

Another premise is that the basis for determining guilt is careful consideration of the evidence versus the law. The law is the reference standard for right vs wrong. The evaluation is done by a jury. Once the evaluation is completed, the jury votes on whether the accused is guilty or not.

Perhaps the most compelling feature of this process is that a guilty verdict cannot be rendered unless the jury vote is unanimous in that direction. Presumably, this reduces the probability of an error interpreting the evidence versus the law, which could occur even when the evaluation is done objectively--i.e., an 'honest error.' It also reduces the chance of subjective bias, particularly one held by the majority of jurors, can tilt the vote.

How would this process differ if a guilty verdict was based on a democratic, or majority, vote? The movie certainly suggests the consequence that many more guilty verdicts would be rendered--and rendered based on personal bias rather than on objective comparison of the evidence versus the law.

My sense is that most people, if asked, would not want demcracy in this process. "In matters of the law, we want to be as sure as we can," might be the rationale.

Yet, how can we reject democracy for rendering judgement on the law if the underlying law has been developed democratically? Are not the same individual biases present when we develop law as when we interpret law? How can we ensure that the law itself provides for equal treatment if a majority vote can inject the whims of the many against the few?

Many of the Founders expressed concerns about democracy for this reason. In the Constitution, the primary explicit safeguard against this was a required 2/3 'supermajority' in passing laws that had been previously vetoed by the president. However, no such supermajority was specified for 'first pass' legislation.

Why the inconsistency in the Constitution? The best answer I can produce is that the Founders were betting that judicial review would check bad bills produced from bad legislative (and executive) process from becoming law. That check disappears, however, when the court possesses interest.

As it stands, I'm not sure how true justice can be rendered when the underlying basis for legal interpretation, the law, is written by mob rule.

Locke and Load

We'll be fighting in the streets
With our children at our feet
--The Who

I want to cut and paste this passage from Rothbard's review of the origins of libertarian thought in Colonial America:

"Locke began his analysis with the "state of nature" — not as an historical hypothesis but as a logical construct — a world without government, to penetrate to the proper foundation of the state. In the state of nature, each man as a natural fact has complete ownership or property over his own person. These persons confront unused natural resources or "land," and they are able to maintain and advance themselves by "mixing their labor with the land." Through this mixing, the hitherto unowned and unused natural resources become the property of the individual mixer. The individual thereby acquires a property right not only in his own person but also in the land that he has brought into use and transformed by his labor. The individual, then, may keep this property, exchange it for the property of others, or bequeath it to his heirs. He has the "natural right" to the property and to defend it against invasion by others. The moral justification for government, to Locke, was to defend these rights of property. Should government fail to serve this function, and itself become destructive of property rights, the people then have the right to revolt against such government and to replace it with one that will defend their rights."

Locke's theory of 'natural rights' provided cornerstone impetus for the American Revolution and for our subsequent structure as a federal republic.

His key points: Individual's natural rights include life, wherewithal to produce with one's life according to one's individual wishes, and personal property.

Government's role is to defend the individual's rights. If a government fails to defend these rights, then people have the right to revolt and swap out the government with one that will defend them.

Turning to our present condition, as government failure to defend individual's individual's natural rights continues to escalate, one has to wonder whether (or when) people will exercise their right to revolution.