Saturday, November 27, 2010

Washington in our pantries



With Thanksgiving leftover still filling our fridges, it’s hard to think of something that brings people together more than food. This is true even in the political arena, where a controversial food safety bill is making strange bedfellows of such disparate groups as free-spirited organic farmers and other localvores and buttoned-down free-market think tanks types.

At the center of debate is senate bill 510, the FDA Food Safety Modernization Act, which is slated for a full senate vote as early as Monday of this week. While advocates say this act will streamline efforts by the FDA and other agencies to keep the United States’ food supply safe, opponents wonder why a food supply already described as “remarkably safe” by the Center for Disease Control needs federal agencies tinkering around with it. They also worry about the negative effects it will have on food prices in general and small farm, organic and artisan products in particular. These, of course, are the very food producers which power a large segment of Vermont’s local and state agricultural economy.

S. 510 re-emerged this fall after a salmonella outbreak this past summer resulted in the recall of half a billion eggs and at least a thousand ill. Fortunately the incidence of salmonella poisoning and most food-borne illnesses has steadily declined over the past few years; but we will never be able to eliminate all risk in life. This summer’s outbreak occurred despite the fact that the Food and Drug Administration already has broad powers of regulation over food safety and production. Funny how government agencies often reward themselves with more power when they screw up, while private companies lose customers and market share and are subjected to congressional hearings when they make mistakes.

Unfortunately, Vermont’s farmers and specialty food makers may feel the brunt of this latest power grab. Though an amendment has been added to this legislation to help relieve small food producers from the over-burdensome nature of the new regulation, it establishes arbitrary limits that make little difference in real terms. For instance, the Tester amendment allows small producers - those earning $500,000 or less in annual sales - to continue under state and local regulations. As soon as they exceed that amount the full force and cost of the legislation comes to bear. With the current economic policies being enacted by the federal reserve and widespread fear of inflation, especially in commodities, that $500,000 number may be reached quickly in the next few years.

Another feature of the Tester amendment - an exemption for those selling most of their food directly to consumers, local restaurants and retailers within a 275-mile radius - makes little sense in practice. Consider this: a cheesemaker from Middlebury could sell her wares to retail outlets in Rochester, New York, which is about 229 miles distant, but has to register with a new federal regulatory agency, submit to federal inspections, fill out a copious amount of paperwork and then keep track of regulation as it changes and becomes more demanding (as it always does) to sell the same cheese to stores in Buffalo, which is 293 miles away. Within large states like California and Texas federal regulations would apply to intrastate commerce.

Large food producers have sophisticated operations able to deal with government requirements. Small producers rarely have the extra financial or or personnel resources to keep up with the onerous burdens increased government regulation necessitates. A few years the Consumer Product Safety Improvement Act was passed and the prohibitive costs associated with adhering to this legislation drove hundreds of small toy manufacturers out of business. Meanwhile, companies such as Mattel and Hasbro live on to stock the shelves for yet another Christmas buying season..

There is one important check on businesses both large and small - the free market. Consumers should be able to decide which risks they are willing to take and which they are willing to pay extra to avoid. In the case of eggs, for instance, pasteurized eggs are widely available in grocery stores, though at a higher price. For those who like to eat cookie dough or make Hollandaise sauce, the extra cost might be worth it. For the rest of us, maybe not so much. Are we not capable of assessing the level of risk without Washington imposing on us safety levels above and beyond what we decide we need?

Businesses have nothing to gain by sickening their customers. It is in the best interest of all companies, large and small, to produce high quality products and quickly remove those that do harm. The pressure of competition encourages businesses to provide the best products possible. Our nation’s food supply is the safest in the world not because of government agencies but because producers are held accountable to consumers.

Monday, November 15, 2010

Corporatism vs. Free Market Capitalism, (and a call to action)

The idea of central planning as the underpinning of an economic system, whether labeled “Socialist”, “Communist”, or “Fascist” is repugnant to those who support free markets, or what might be broadly referred to as “Capitalism”.

There is however an equally repugnant but more insidious system that has materialized without many open advocates or a genuine philosophical underpinning. For lack of a precise term, it might be known as “corporatism” or “crony capitalism”, mixed in with a few tablespoons of genuine fascism. Basically, this is the economic and political system that reigns supreme in the contemporary United States of America. This system is abhorrent to free market principles and its economic effects are disastrous to the vast majority of citizens. In addition, it makes a mockery of the rule of law and destroys individual liberty, initiative, and the entrepreneurial spirit. Perhaps even more diabolical however is the fact that this system persists while masquerading as genuine “capitalism” and a system of “free markets”.

Our entire education system (up to and including elite post-secondary and graduate schools) along with the big-named economists, pundits and mainstream media talking heads persistently emphasize the idea that the United States is a society based on capitalism and the concept of free markets. During our 200+ year history, there have been periods where the description was generally accurate. In the current economic environment, the bones of the free market have been picked clean by the corporatist vultures and only the pale ghost of capitalism remains. Yet, the so-called mainstream thinkers are remarkably successful in maintaining the illusion and allowing the widespread damage and economic injustices of rampant statism and central planning to be blamed on free market capitalism.

Under this guise, the so-called “financial crisis” of 2007 and 2008 led many to suggest that we were witnessing the great failure of free markets and the culmination of the Marxist prophecies predicting capitalism’s demise. Beyond the smoke and mirrors however, we were seeing the bright beacon of the free market’s potential and the bloody fingerprints of central planning on a grievously wounded economy. An edifice based on decades of interest rate manipulation (repugnant to the principles of a free market) combined with statist interference in the mortgage industry (a-la Fannie, Freddie, FHA, etc.) and a culture of widespread federally sanctioned fraud stood poised to come crashing down with a delicate wave of the invisible hand. Even after this prolonged period of rule bending and statist intervention, the force of the free market was being felt. The perpetrators of fraud and those whose greed had led them to massive mal-investment were about to be punished. The culprits at the Federal Reserve and the central planners in government were on the verge of having their meddling and mis-allocation of resources explode in their faces. Only a massive and unprecedented onslaught of government support and an insane money-printing spree were able to sustain the system. Temporarily.

Fraud is generally repugnant to any society or economic system, and especially so to the advocates of a free market. Though they cause temporary distortions, frauds and swindles are ultimately expunged by the fundamental nature of the free market. Thanks to massive statist intervention and active government participation in the perpetration, legitimization and obfuscation of fraud, this warped system of U.S.-style corporatism has been remarkably persistent. Monumental interventionism has granted the system a temporary stay of execution, and the spectre of the free market has been momentarily banished. Yet another layer has been added to the economic house of cards. Financial institutions remain bankrupt by any fair or accurate accounting standards. The Federal Reserve is single-minded in its focus to suck every last drop of blood from the productive economy to keep the parasites alive. Commodity prices increase in the presence of stagnant wages causing pain to the lowest income earners. Value-adding producers in the real economy see their operating margins compressed to oblivion as their input costs rise with zero ability to pass on price increases to the wealth-stripped customer. Massive government deficit spending (now accounting for nearly 10% of GDP), is necessary just to keep up the slightest fiction of economic recovery, and an incessant string of spurious (later revised) government statistics is seized upon by the mainstream media propaganda machine as evidence of progress.

Economic prognostication in this environment of statism and interventionism is a fool’s errand, but it is likewise foolish to suggest that any of the major economic trends are moving in a direction likely to yield improvement for the average U.S. citizen. The free market WILL ultimately prevail. Whether it triumphs by a sudden “return to sanity” in the current environment, gradually works through a period of prolonged economic misery, or arises from the ashes of a general societal meltdown is the only question. Regardless of how the end game plays out however, those who would champion liberty, sound monetary policy and free markets have a MISSION! It is our imperative to expose the doppleganger of corporatism and shatter the illusion that the economic malaise of the 21st century United States of America is due to shortcomings of the free market or capitalism. Whether we fix the problem now, or in years hence are left only to fix the blame, the economic misery of millions must be inextricably linked to the corrupt corporatist system and the miserable failure of central planning.

Thursday, November 4, 2010

Thoughts on Green Mountain Communes

Green Mountain Communes: The Making of a Peoples’ Vermont

http://www.anarkismo.net/newswire.php?story_id=7248


I found this article giving a brief history of Vermont communes to be a fascinating read which should be enlightening for people across the political spectrum. The examples are a microcosmic genesis of contemporary political tension. I was entirely enthused with the concepts up until the descriptions of militarism and the subsequent “Progressive Party” type ideas.

The spirits of local entrepreneurship, cooperation, sustainability, gender equality and voluntary social arrangements are all excellent. If the current crop of "Progressives" would take a little bit of individual (or collective) initiative and attempt to solve social problems by similarly creative and ambitious means, perhaps it could serve as a "model" for others to follow.

Perhaps the contemporary progressive movement has instead fallen prey to a certain intellectual laziness or collective myopia? Rather than working in a system of voluntary participation such as these early communes, the current "Progressive" ideal has been twisted into a belief system which advocates that resources be extracted from INvoluntary participants through the use of force. These resources are then reallocated by nonproductive central planners in an attempt to achieve an outcome which might represent an “idealized” version of these bygone communes. Such an outcome was never genuinely achieved by these systems, as indicated by the eventual dissolution of the groups, and such an outcome is definitely unachievable through coerced participation.

I fully support the local farmer's markets and food co-ops and buy from local producers as much as possible. I'll donate to local charities and lend a hand to my friends and neighbors in times of need. I make these choices willingly. If a group of my fellow Vermonters desire, by mutual agreement, to set up a communal living arrangement and behave in accordance with their own social norms, values and microeconomic systems, I would steadfastly defend their freedom to do so.

However, when such a group of people organize (i.e. politically) and decide that it is within their right to confiscate wealth from others by the use of force, and then attempt to re-shape all of society to conform to THEIR subjective ideals, I will resist. Mr. Houriet believes that future economic conditions will motivate people to adopt a more communal societal arrangement such as the early communes described. If that eventuality is indeed in our future, so be it. We will then choose freely to participate. As of now, economic necessity does not mandate this style of living and it is therefore immoral and unjust to use government as a mechanism to compel such arrangements on unwilling participants.

Wednesday, November 3, 2010

Have a cup of tea


The American people have just erected the largest and most important trade barrier in history - they said no to the importation of European democratic socialism and decided it’s time to support to the greatest product this nation has ever produced domestically - constitutional government based on the principles of economic and political freedom.

Oh, sure, there are still a few European wannabes holding out for their piece of France - our own beloved Vermont and much of New England, New York and California come to mind. But this election has shown the rest of the country is responding to messages of fiscal responsibility, limited government, free markets and individual liberty and responsibility. Not at all coincidentally, these are the very ideas that have been found on placards, heard in speeches and expounded upon in numerous opinions pieces since the Tea Party movement roared into existence eighteen months ago.

The people of the Tea Party have overcome tremendous opposition in their fight to restore accountability to American politics and policy. First they were dismissed, then mocked, then attacked. According to a famous quote from Mahatma Ghandi, that is the natural progression in any situation when a bunch of upstarts dares to take on authority.

But then, Ghandi said, you win.

The Tea Party has entered the “win” phase. In a relatively short time, it has evolved from scattered groups of citizens holding rallies marked by the singing of patriotic songs, recitations of the pledge of allegiance, opening and closing prayers, dissertations on American history and more than a few angry speeches and into a collection of politically savvy activists. For some months now the Tea Party has been defining the terms of our national debate.

This reality strikes fear in the hearts of established politicians, who rather enjoy spending their days figuring out ways to increase their own wealth, power and status. Having to work with people supported by country-class rubes is rather distasteful. Republicans already know this, having already been forced to rub shoulders with these candidates. Democrats are about to meet the riffraff.

Tea Party-backed candidates who are heading to Congress have a quaint but specific mandate from voters - they are expected to actually read and understand the Constitution of the United States and honor the spirit of the document that codifies the uniquely American political philosophy based on the concept of natural law and its byproducts - maximum individual liberty, state sovereignty and limited national government.

None of this fits the ruling class agenda so its contempt for those of us who still share the founders’ vision knows no bounds. But what really frustrates the Washington elite, politicians and pundits alike, is that the Tea Party is such a moving target. It provides no leader to besmirch and attack because it is composed of millions of motivated citizens working together in thousands of small groups for a common cause. The charge that the Tea Parties receive millions of dollars in funding from shady outside sources is patently untrue. As someone who heads a small group here in Bennington, is associated the larger Vermont liberty movement and counts many New York Tea Party members as friends, I know that every time we want to rent a fair booth or order a box of pocket-sized Constitutions we have to pass the hat.

I also know the liberty movement’s motto, “Don’t Tread on Me,” applies to politicians and fellow travelers alike. Media pundits who only understand centralized power cannot accept this new paradigm and keep trying to make the members of the liberty movement fit into their Washington box of consensus building and compromise. But trying to control this movement is like herding cats. Each town, county and state organization is different from each other and from their counterparts across the country. We’ve agreed to disagree on many issues and remain civil and cooperative as we stand committed to those political values on which we can unite. The Tea Party may be the embodiment of the form of government our founders envisioned for this country, one truly organized by and for the people.

The American people understand bigger isn’t necessarily better when it comes to most things, especially government. They understand the solutions to our difficulties can be found within the American people and the communities they comprise. They are willing to do what needs to be done but they are no longer willing to beg for Washington’s permission to govern themselves and their communities as they see fit. Increasingly they realize that what D.C. does or doesn’t do should be irrelevant in American lives.

Their challenge, now that they have reached this new understanding, is to make sure their representatives also understand and respect the new American paradigm and, when it comes to government, keep buying American