Quote of the Day: Government is not to be trusted. Ever.

Repeat after me: Government is power.  Government is not to be trusted.  Ever.  Even if you believe that some government is and will always be necessary, that ‘necessary’ piece of government should always be regarded as a prudent lion tamer regards the big carnivorous cats that are ‘necessary’ for him to make a living.  To imagine that seemingly subdued purring lions can be trusted to be dealt with in any ways that do not include the use of strong cages, leashes, ceaseless and deep suspicion, and escape hatches is the height of romantic absurdity – wishful thinking of the most extreme and inexcusable sort.  Government is by its very nature a dangerous, untrustworthy, dishonest, arrogant, slippery entity – characteristics that are by no means reduced anywhere near to insignificance by a wide franchise, regular elections, and sturdy ink-on-parchment documents called “constitutions.”

Unless you are a high-ranking government official, government - no government – is ever “Us.”  It is always “Them.”  And They are not to be trusted.  Ever.

(italics original)

This is from Café Hayek’s Professor Don Boudreaux on Edward Snowden NSA spying expose

Quote of the Day: Power is the root of corruption; other aspects are its symptoms

The  following insightful but lengthy quote references China’s political economy, as written by Professor Weiying Zhang in "The Logic of Markets" (courtesy of and thanks to Mao Money, Mao Problems) [bold mine] 

I once used a mathematical equation to analyze and show that the increase in actual corruption has a few origins. One is that with the increase in the degree the Chinese economy has monetized; the economic value of power has increased. The second is that the complexity of economic relations has caused supervision to become more and more difficult. The third is the growth in market opportunity caused government officials to “preserve utility” (the utility they would receive if they were forced out of the government as punishment for corruption). The fourth is the level of punishment has been reduced (such as the amount embezzled to receive the death penalty was increased significantly). The fifth is the formal salaries of government officials are relatively low. 

The five factors described above are all related to power. Power is the root of corruption; other aspects are its symptoms. Anti-corruption measures must address both the symptoms and its root, but direct action would cure the root. That direct action is to reduce the power of government officials. Some have proposed “high salaries to encourage honesty,” which makes a bit of sense. In a situation where the power of government officials is excessive, honesty cannot be encouraged with high salaries. If officials’ salaries are too high, the masses will not accept it. The key issue here is that government departments in our country have monopolized many rights that belong to private citizens and businesses in other countries with a market economy. Examples include starting a business and engaging in investment activities, which require government approval. Individuals and businesses have no option but to “buy out” by means of corruption rights to engage in normal economic activity that should belong to them in the first place. In connection with anti-corruption measures at present that only cure the symptoms without curing the cause, I said in 1994 that if we do not change the fundamentals of our government controlled economic system, and reduce the government’s administrative approval authorities, corruption of private goods (according to the definition in economics, without exclusiveness) is instead a “sub-optimal” choice. My meaning is that to stop corruption we must cure its root, not its symptoms. On the one hand stressing anti-corruption measures without wanting to reduce government power on the other hand is self deception. Not only can it not succeed, or even if it succeeds in the short term, it comes at the price of a huge impairment to society. A prerequisite for high economic growth without corruption is the abolition of the government’s monopoly over the power to allocate resources. Some say that I am defending corruption, but actually this is a misunderstanding of my views. Penetrating discussion of issues is the responsibility of scholars. In 1999, at the High Level Forum on Chinese Development, I said, “Government control needs to be given up just as drugs need to be given up,” and added, “If government examination and approvals were abolished, corruption could be reduced by at least 50%.” This message had a large impact on the proceeding system of examination and approvals reform. Ten thousand good wishes cannot match one effective action!

As shown above, corruption is a byproduct of a raft of arbitrary statutes, regulations and edicts, that bequeaths unnecessary political power to political agents which incentivizes abuse or what public sees as immoral 'corrupt' actions.

And when the media and credit rating agencies pontificate on political ascendancy from so-called anti-corruption reforms by merely persecuting ‘corrupt’ officials, pay heed or be reminded of the reverberating words of Professor Weiying Zhang 

stressing anti-corruption measures without wanting to reduce government power on the other hand is self deception.

In other words, never confuse substance with form, or symptoms with the cause.

By the way here, is a short comical skit depicting "Too Much power" culled from a 1957 movie called "A King in New York City" played by the late British comedian icon Charlie Chaplin and his son Michael. (hat tip Prof Bob Murphy)

Is The Newspaper Industry Dead? Probably Not If It Is For Free

We talked about the potential fate of the newspapers in the advent of the internet [see Creative Destruction: Newspaper Industry Headed For The Dinosaur Age?], where traditional newspapers represent as the "old industrial age economy", which currently suffers from "creative destruction" from the transition to news based on the web or the "information economy'.




Nevertheless, this interesting commentary and picture from the Wall Street Journal Blog,

``If Ben Bernanke drops newspapers from a helicopter, will it save the beleaguered publishing industry?

``Probably not. But the plucky Hong Kong newspaper The Standard is using a cartoon drawing of such a fantastical occurrence to brag about the paper’s circulation, now above 200,000.

``In a so-called house ad (called that because the house, the newspaper, couldn’t sell the page to a paying advertiser), Chairman Bernanke tosses copies of the Standard from a red helicopter over Hong Kong’s skyline. The headline on the paper “WORST LIKELY OVER.”

Free newspaper will probably not end for as long as the other sources of revenues outside subscription -particularly advertisements- will be able to cover the costs of maintaining these prints, overhead and distribution.

However, competition from the web and the TV for ads will be tight as to render the sustenance of free news as suspect.

Importantly, the diminishing role of newspaper is likely to reconfigure the flow of information which is likely to impact the distribution of power held by the mainstream via mainstream news.

As Professor Gary North projects (bold emphasis mine),

``Printed daily newspapers are doomed. On-line daily paid-subscription newspapers are also doomed. Conclusion: the Establishment is about to lose one of its three major instruments for shaping public opinion: newspapers, the TV networks, and the tax-funded schools...

``The era of Establishment control over the flow of ideas is ending. That era rested on the high cost of entry. Now anyone can enter. The mammoths are in the par pits, with their huge buildings, huge staffs, and huge debts."

So creative destruction in media is likely to also affect the distribution of political power.

Example of Political Priorities: Politics First, You Later

This should be a good example of public choice, where officials decide on the basis of their self-interest than for the public good.

From Mary Anastasia O' Grady of the Wall Street Journal, (bold highlights mine) [hat tip: Cafe Hayek's Don Boudreaux]

``The image of House Speaker Nancy Pelosi wielding what resembled an oversized mallet while leading a mob of congressmen across Capitol Hill on the day of the health-care vote is the stuff of nightmares. It is also instructive. As a metaphor for how the Democrats view their power, the Pelosi hammer-pose could not be more perfect.

``Just ask Honduras.

``Last year, the U.S. tried to force the reinstatement of deposed president Manuel Zelaya. When that failed and Team Obama was looking like the Keystone Cops, it sent a delegation to Tegucigalpa to negotiate a compromise.

``Participants in those talks say Dan Restrepo, senior director for Western Hemisphere affairs at the National Security Council, let slip that the U.S. interest had to do with American politics. The Republicans, he said, were using the administration's support for Mr. Zelaya, an ally of Venezuelan Hugo Chávez, against the Democrats. It's not going to work, Mr. Restrepo is said to have informed the other negotiators, because "we have the power" and would be keeping it for a long time.

``It can't have been comforting for Hondurans to learn that while their country was living a monumental crisis, fueled by U.S. policy, Mr. Restrepo's concern was his party's power. For the record, an NSC spokesman says "Mr. Restrepo didn't say that." But my sources are more plausible considering what has transpired since."

Bottom line, according to Ms. O' Grady: ``It's hard to imagine what the U.S. thinks it achieves with a policy that divides Hondurans while strengthening the hand of a chavista. Revenge and power come to mind. Whatever it is, it can't be good for U.S. national security interests."

Ludwig von Mises on politics: "Political realism, that hodgepodge of cynicism, lack of conscience, and unvarnished selfishness."

4-Block World: Fawning Eulogies

From Tom McMahon's 4-Block World:

Let me add a quote from Professor Don Boudreaux, (all bold highlights mine)

``While Kennedy didn’t choose a life of ease, he did something much worse: he chose a life of power. That choice satisfied an appetite that is far grosser, baser, and more anti-social than are any of the more private appetites that many rich people often choose to satisfy...

``Instead, Mr. Kennedy spent much of his wealth and time pursuing power over others (and of the garish ‘glory’ that accompanies such power). He did waste his life satisfying unsavory appetites; unfortunately, the appetites he satisfied were satisfied not only at his expense, but at the expense of the rest of us. Mr. Kennedy’s constant feeding of his appetite for power wasted away other people’s prosperity and liberties".

Well learning from the above, such mawkishness (especially in the political context) should be avoided. And this should apply elsewhere including the Philippines.

The US Federal Reserve: The Creature From Jekyll Island

Learn about the origins of the US Federal Reserve system, the nature of its operations, the underlying principles and unstated goals, the personalities, the organizations and networks involved in its conception and its operation, and ultimately the price that Americans and the world pays for its existence.

G. Edward Griffin, author of The Creature from Jekyll Island, gives a fantastic one hour audio presentation. [Hat tip Chrismarteson.com]

press on the link below...

http://0101.netclime.net/1_5/202/057/247...

In case you'd be interested with the transcript I've included a scribd document which partly covering the speech.
The Creature from Jekyll Island, by Edward Griffin