Government Sponsored Corporations

Say that you'll never, never, never need it

One headline, why believe it?

Everybody wants to rule the world
--Tears for Fears

Donald Trump is suing several social media companies over their efforts to censor him. Critics argue that the suit can't possibly win because companies like Twitter and Facebook are privately owned.

The issue is not ownership, however. The issue is whether an entity is open to government influence. If, for example, Twitter gets resource grants from the government, or if it receives favorable regulatory treatment, then the company is susceptible to influence and a potential tool for government-sponsored action.

A plaintiff should not even have to prove that Twitter has acted on behalf of government. It merely needs to demonstrate that the company has received favorable government treatment and is therefore 'available' to the government.

If Twitter has received favorable government treatment, and there can be little doubt that is has, then it is essentially a 'government sponsored corporation.' A GSC must abide by the same rules that apply to any government agency--including those that govern free speech as specified by the First Amendment.

Mandates No More

No more running down the wrong road
Dancing to a different drum
Can't you see what's going on
Deep inside your heart
--Michael McDonald

Texas Governor Greg Abbott has signed an executive order blocking state sponsored entities, including public schools, from requiring masks or vaccines as countermeasures to CV19. 

"The new executive order emphasizes that the path forward relies on personal responsibility rather than government mandates," Abbott said.

The governor appears to have learned from his past mistakes. He joins a growing list of officials to reverse previous policy mandates for masks, lockdowns, etc.

Abbott added that Texans "have the individual right and responsibility to decide for themselves and their children whether they will wear masks, open their businesses, and engage in leisure activities."

Right on, governor. As these pages have noted since the beginning. Let the people decide.

Benefits of Specialization

Treating today as though
It was the last, the final show
Get to sixty and feel no regret
It may take a little time
A lonely path, an uphill climb
Success or failure will not alter it
--Howard Jones

Specialization is the extent to which individuals or organizations perform narrow groups of tasks, with commensurate limitations in variety of output produced. Specialization generally leads to higher productivity (i.e., output/labor hr) because of learning effects, lower switching costs, and other economies. The benefits of specialization explain why dividing tasks among workers (i.e., division of labor) is among the most intuitive of economic acts.

In order to realize those productivity gains, however, trade must flow freely. Because they produce limited variety, specialists are unable to produce the broad array of goods that they need to advance their standard of living. Those goods must be acquired from other producers--most likely from other specialists. 

When specialists can trade freely, then the economies of specialization are collectively realized. Prosperity improves for all.

The prospective reward associated with specialization is therefore high. But we also know that there is a positive relationship between reward and risk. Generally, endeavors that offer the prospect of higher reward carry more risk as well.

We'll consider the risks of specialization in an upcoming post.

Hysterical Hypocrisy

When you get that feeing

Better start believing

--Def Leppard

Cribbing this from a social media post I recently saw. Nice summary of the jaw dropping hypocrisy currently being displayed by leftists.

Them: Education is a universal right.
Also them: Education is a privilege we control.

Them: My body, my choice.
Also them: Bodily autonomy is a privilege we control.

Them: Open borders, no carding.
Also them: Vaccine passports to control you life.

Them: Equality.
Also them: Segregation.

We've noted the blatant hypocrisy before. But what is happening now resembles psychological dependence on hysteria.

Political Prisoners

Trim life shadows flicker and fall
But you still can't turn away
Get up and run before you stall
Before the edges fray
--Ric Ocasek

Ron Paul discusses the US version of Soviet show trials in which people who entered the "People's House" in January are being imprisoned on political charges. They are accused of being terrorists despite commission of no violent acts or nor evidence that they contemplated terrorist acts.

This is not the first time the federal government has unjustly held political prisoners. John Adams and the original Sedition Acts, Lincoln during the Civil War, FDRs WWII internment camps, the ongoing Guantanamo Bay group.

As Paul warns, people who are ok with this sort of thing--particularly because the present wave of convictions aligns with their political views--are likely to see the tables turned at some point.

When prisoners are permitted to be taken for political purpose, sooner or later, they're coming for you.

Better Balance

Miyagi: You remember lesson about balance?
Daniel LaRusso: Yeah.
Miyagi: Lesson not just karate only. Lesson for whole life. Whole life have balance...everything be better. Understand?
--The Karate Kid

As an investor, I used to bet on one macro scenario. Even if I reasoned that several outcomes were possible, I'd put all my chips on the one I thought most likely.

I've come to learn that isn't a good idea. My most likely scenario might not materialize. And even if it does, it might take much longer than expected. Meanwhile the underweighted scenarios dominate.

So now I spread it around. If I envision three possible scenarios, then I allocate capital more or less equally among those three. I might adjust them a bit based how I suspect things might unfold, but I retain material exposure to all of the possibilities.

Although I won't kill it if my preferred scenario happens to play out, my performance is more balanced.

I no longer worry about having to be exactly right in both direction and timing. And I sleep better.

Tocqueville's Warnings

"You have to understand, most of these people are not ready to be unplugged. And many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it."
--Morpheus (The Matrix)

GMU's Dan Klein discusses some important points from Alexis de Tocqueville's Democracy in America. In 1831 Tocqueville and a colleague were sent by the French government to study America's prison system. For the better part of a year, they toured the US and some parts of Canada. 

After returning home and reporting their findings, Tocqueville continued on, writing a two volume set with the first volume published in 1835 and the second in 1840. Although titled Democracy in America, Tocqueville's work was really a treatise on democracy in general, a phenomenon that in his view had been in motion for centuries.

Klein focuses primarily on Tocqueville's conclusions, or warnings, many which appear near the end of volume two in a chapter entitled, "What Sort of Despotism Democratic Nations Have to Fear." It turns out that Tocqueville had been worried about the ultimate outcomes of democracy for some time, and his whirlwind tour of the US did not quell his fears. According to Klein, Tocqueville feared two scenarios in particular.

One was despotism from a "tyranny of the majority." Tocqueville was not the first to envision such an outcome, as similar concerns appear in the writings of our founding ancestors. Tyranny of the majority is bad not only because it rules by shallow, group-inflicted dogma (rather than by rule of law), but because of its constant expansion of government and its dominance in social affairs. Even if citizens do not regard it as tyranny, Tocqueville argues that it is because it is not in each citizen's interest. It "monopolizes movement and existence" even though "it does not ride roughshod over humanity."

Tocqueville's point is that tyranny of the majority can subtle, gradual, and perhaps even enticing enough for citizen subjects to demand it.

This leads to a worse scenario. Citizens "renounce the use of their wills" and lose "little by little the faculty of thinking, feeling, and acting for themselves." They outsource their faculties to rulers believed to make decisions in their interest--often under the guise of equality of condition.

Such a belief is delusional. Tocqueville writes that a small group inevitably assumes control of the machinery of government for its own interests. Tyranny of the majority becomes tyranny by minority rule. The power proceed to destroy or modify institutions and customs. 

Ironically, people come to prefer "equality in servitude to inequality in freedom." Wow. Well said.

A citizen enjoys "goods as a tenant, without spirit of ownership." A "miserable person" can understand "robbing the public treasury or selling favors of the state for money...and can flatter himself with doing as much in his turn."

At the time of his writing, Tocqueville opined that "the majority...still lacks the most perfect instruments of tyranny...If ever freedom is lost in America, one will have to blame the omnipotence of the majority"

It is difficult not to spot manifestations of Tocqueville's warnings in current affairs.

Principled Living

It's 2 am
The fear is gone
I'm sitting here waiting
The gun's still warm
--Golden Earring

If you abide by the non-aggression principle, then you live your life by peacefully pursuing your interests. You do not seek to coerce others to align with your view of the world. If you want to influence others, then then you try to do so via persuasion, not by violence.

The alternative is living by the aggression principle. Here you seek to control the behavior of others through use of force. Rather than through persuasion, you 'influence' others by point of gun. 

You might point the gun directly. But in many cases that would put you in jail. 

Conveniently, institutions have been arranged so that you can act aggressively and get away with it. You can hire government agents to point the gun for you. And that is legal.

Most people live by the aggression principle. They are principals of violence.

Unmasked Again

It's easy to deceive
It's easy to tease
But hard to get release
--Billy Idol

Another study, this one out of U of Louisville, finding no significant effect of either mask use or mask mandates on CV19 cases.

Keep in mind that what officially was counted as a CV19 'case' was not constant throughout the study period.  PCR thresholds were being lowered, resulting in more cases being counted at a given 'true' level of infection.

As such, it would be interesting to add both hospitalizations and death counts to this analysis.

Looking Good

Louis Winthorpe III: Looking good, Billy Ray.
Billy Ray Valentine: Feeling good, Louis.
--Trading Places

Meyer & Rowan (1977) famously observed that organizations often adopt practices ceremonially rather than for technical benefit. The primary objective is to look good rather than to do better.

It is difficult to argue that we aren't witnessing their observation being played out in spades.

Reference

Meyer, J.W. & Rowan, B. (1977). Institutional organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83: 340-363.