Quote of the Day: Voting is Not a Duty, but a Right—Including the Right to Abstain

Economist Gary Galles writes at the Independent Institute on voting:

“If you don’t vote, you don’t have a voice in government”: This claim is falsified by the fact that even casting your vote won’t give you an effective voice in government.

“If you don’t vote, you have no right to complain about government”: This argument fails for the same reason. It also ignores the fact that facing what are typically binary choices between candidates, and yes-or-no votes on special-interest initiatives, further degrades your ability to invoke your preferences.

“If you don’t vote, you don’t care about America”: This is similarly unconvincing when your vote doesn’t alter the outcome. Not only has abstaining been common since America’s foundation, but not voting is perhaps the most effective way to protest that “none of the above” represent what you consider acceptable, because voting for “the lesser of two evils” is still voting for an evil.

“It is your duty to vote”: This assertion runs aground because if your vote won’t change the outcome, it cannot be your social duty. Voting is not a duty, but a right—including the right to abstain. Further, most voters are far from informed on most issues, and casting an uninformed vote is more a dereliction of duty than a fulfillment of it.

“You must vote, because the electoral process would collapse if no one voted”: This ignores two facts—that your individual vote won’t matter, and that virtually no one’s individual choice of whether to and/or how to vote alters an appreciable number of others’ voting choices. (Politicians, who won’t be taken seriously if they abstain from voting, are an exception.)

Does the fact that so many “your vote is crucially important” arguments are invalid imply you shouldn’t vote? No. However, those claims cannot justify voting on issues you are uninformed about, since that offers society no benefits. Since your electorally insignificant vote won’t change the outcome, it also means that voting to forcibly transfer others’ wealth to you or your pet causes is ineffective, as well as morally objectionable.

However, if such errors are avoided, voting can provide a means of cheering for those candidates and proposals that advance what James Madison called “the general and permanent good of the whole” without plundering others. So, while logic does not demand that you vote or that you abstain, it does impose limits on what one can justify voting for.

The above should not just apply to America, but elsewhere, including the Philippines

Dilbert's Scott Adam's on A Voter's Guide to Thinking

At his website, Scott Adams of the Dilbert comic strip fame offers eight tips to improve a voter's thinking process

A Voter’s Guide to Thinking

1. If you are comparing Plan A to Plan B, you might be doing a good job of thinking. But if you are comparing Plan A to an imaginary situation in which there are no tradeoffs in life, you are not thinking.

2. If you see quotes taken out of context, and you form an opinion anyway, that’s probably not thinking. If you believe you need no further context because there is only one imaginable explanation for the meaning of the quotes, you might have a poor imagination. Sometimes a poor imagination feels a lot like knowledge, but it’s closer to the opposite.

3. If a debate lends itself to estimates of cost (in money or human suffering) and you aren’t willing to offer an estimate in support of your opinion, you don’t yet have an opinion.

4. If you are sure you know how a leader performed during his or her tenure, and you don’t know how someone else would have performed in the same situation, you don’t actually know anything. It just feels like you do.

5. If something reminds you of something else (such as Hitler, to pick one example) that doesn’t mean you are thinking. That just means something reminded you of something. A strong association of that type can prevent you from thinking, but it is not itself a component of reason.

6. Analogies are not an element of reason. Analogies are good for explaining things to people who are new to a topic. If I am busy as a beaver, that does not imply that I also build dams by gnawing on wood. It just means I’m busy.

7. If you think your well-informed and reasoned opinions as a voter are bringing up the average, let me introduce you to the 100% of other voters who believe they are bringing up the average as well.

8. If your opinion is based on your innate ability to predict the future, you might be employing more magical thinking than reason. The exceptions would be the people who use data to predict the future, such as Nate Silver. That stuff is credible albeit imperfect by nature. Your imagination is less reliable.

 Dandy.

Video: Myth of the Rational Voter: Make Progress, Not Work

Econolog economist, professor and blogger Bryan Caplan explains why free markets (and not labor protectionism) leads to progress

From Learn Liberty: 

As technological developments increased farm yields over the last two centuries, the share of the US population employed in agriculture fell from around 90 percent to around 2 percent. The lay American public supposes that when workers lose their jobs, we become worse off — they suffer from what economist Bryan Caplan calls the 'make-work' bias. But would anyone prefer to live in a society in which many went hungry and no one enjoyed the wealth, financial security, job growth, and innovation created as all those workers lost their farm jobs? Follow Caplan, author of The Myth of the Rational Voter, as he explains the gap between the public's opinion and the economist's facts. In this video, Caplan talks about the merits and demerits of 'making work' - instead of letting individuals find work. 

► Learn More: 

-Frederic Bastiat contends that to aim to increase the proportion of effort to output is to imitate Sisyphus in his hopeless attempt to move a stone up a hill: http://mises.org/daily/6157/Industry-... 

-Daniel J. Mitchell explains the fallacy that government creates jobs: http://www.cato.org/publications/comm...

Quote of the Day: Democracy is a Joke

People will tell you that democracy requires a well-informed citizenry. Some will tell you, with a straight face and an earnest tone, that you have a “duty” to keep up with the news so you can participate in public affairs. Some countries – notably Argentina and Australia – even require citizens to vote.

But this presumes people have access to some set of relevant facts… and then make up their minds intelligently, applying the known facts to the public policy alternatives.

It is nonsense for two fundamental reasons.

First, there are no facts in public life, just memes and BS.

Second, even if there were meaningful facts, the individual citizen is hardly equipped to evaluate them. After so many millennia with no public life of any sort, we don’t know how to judge or master it.

Let me give you an example…

Candidate X tells us he is in favor of cutting government spending. Candidate Y tells us he intends to make the government more efficient. Candidate Z tells us we will all be better off, if the government spends more money to stimulate the economy.

And President Obama says he has a plan to improve the nation’s health-care system.

These are all “facts” – reported in the news media and widely debated in opinion columns and talk shows. But is there any way for the poor voter to know what the politicians really believe… or which public policy is likely to produce the best result?

Nope.

We know, after decades of experience, that public policy rarely improves our private lives. The more ambitious it is – as in the Soviet Union or Nazi Germany – the more it subtracts from our own hopes and plans…

Now, a young man can graduate from a leading university with a head full of public facts… and know nothing at all.

This is from Bill Bonner at Bonner & Partners

Quote of the Day: In democracies the main alternative to majority rule is the markets

In the minds of many, one of Winston Churchill’s most famous aphorisms cuts the conversation short: “Democracy is the worst form of government, except all those other forms that have been tried from time to time.” But this saying overlooks the fact that governments vary in scope as well as form. In democracies the main alternative to majority rule is not dictatorship, but markets

This is from prolific blogger, author and professor Bryan Caplan’s must read The Myth of the Rational Voter

Video: Median Voter Theorem: Why politicians sound the same

The following video from learnliberty.org explains why politicians sound almost the same. (hat tip Cafe Hayek)

Via the median voter theorem, the general tendency of political rhetoric have been geared towards the “outcome most preferred by the median vote” or telling the median voters what they want to hear in order to gain their votes or approval.

In other words, political rhetoric panders to the economically ignorant populist "madlang people" irrational voters

Philippine Elections: The Politics of Symbolism

From the Inquirer:

A day after unofficial election results showed her ahead in the Senate race, Grace Poe evaded a television reporter who wanted to shadow her, received business cards handed to her staff by strangers and had Pad Thai noodles for lunch…

Nalokah (crazed),” was how Poe described herself in a solicited text message upon learning that she was No. 1 in the partial and unofficial tallies aired on television hours after voting precincts closed on Monday.

“I was very surprised, I was blown away,” she said…

Poe realized during the campaign that people wanted a closure to her father’s death. She said these people saw her “as the image of FPJ in defense of the oppressed, the champion of the poor” in his movies.

The result of the Philippine national elections demonstrates and validates theories and academic studies showing why elections are nothing but about feel good politics and of the myth of the rational voter.

The lists of winners consist of families from the political elites, celebrities or people with popular symbolical representations or a combination of.

As I wrote back then on the US elections

It would be conceivably naïve to rely on political rhetoric of competing candidates as basis for examining and projecting prospective policies.

Politicians usually appeal to the views the median voter to ensnare votes. In other words, politicians, who are running for office, are predisposed to say what the public wants or expects to hear.

On the obverse end, people hardly vote for policies but for symbolisms which these candidates represent. Thus aspiring politicians work hard to project themselves as symbols to reinforce people’s biases.

And this is why politicians usually end up with unfulfilled promises or have usually gone against their rhetorical assurances made during the campaign sorties.

Voters become useful only to politicians when election season arrives.

Yet the oppressor-oppressed political axis (Arnold Kling: Three Languages of Politics) which has been embedded deeply in human nature represents how domestic politics works, or how local politicians have exploited the Progressive perspective of justifying ‘social justice’ through coercive redistribution.

This serves as another reason why the Philippine boom will soon be revealed as a paper tiger. Social policies will be directed mostly towards redistribution than to real economic reforms. This means more government spending that will be financed by higher taxes, debt and inflation.

All these validates my view of the quasi-mob rule way of the selection process, which lays foundation to the local version of social democracy that has been skewed to, or even tacitly designed for the benefit of the political class and their allies.

As an old saw goes "the more things change the more they stay the same"

Quote of the Day: How Insiders Use Democracy to Pick on Your Pockets

Napoleon Bonaparte himself was an outsider. He was not French, but Corsican. He didn’t even speak French when he arrived in Toulon as a boy. But there never is one fixed group of people who are always insiders. Instead, the insider group has a porous membrane separating it from the rest of the population. Some people enter. Some are expelled. The group swells. And shrinks. Potential rivals are brought in and bought off. Weak members are pushed out. Sometimes, a military defeat brings a whole new group of insiders into power. Elections, too, can change the make-up of the core group.

The genius of modern representative government is that it allows the masses to believe that they are insiders too. They are encouraged to vote…and to believe that their vote really matters. Of course, it matters not at all. Generally, the voters have no idea what or whom they are voting for. Often, they get the opposite of what they thought they had voted for anyway.

The common man likes the idea that he is running things. And he pays dearly for it. After the insiders brought him into the voting booth, his taxes soared…

In short, the insiders pulled a fast one. They allowed the rube to feel that he had a solemn responsibility to set the course of government. And while the fellow was dazzled by his own power…they picked his pocket!..

By the 20th century, developed countries could afford the cost of maintaining an expensive level of military preparedness, even when there was not really very much to be prepared for. But the common man was skinned again. Not only was he expected to pay for it, still under the delusion that he was in charge, he also was made to believe that he had a patriotic duty to defend the homeland insiders! That is the real reason that the modern democratic system has spread all over the world. It allows the insiders to mobilize more of the resources and energy of the country on their behalf. Nothing can compete with it.

This is from the Daily Reckoning’s Bill Bonner

Video: Should Voting Be Mandatory? 13 More Reasons Not to Vote

The following video explains why mandatory or coercing people to vote will not be constructive for a society

From Learnliberty.org (thanks to Tim Hedberg for the video):

Professor Jason Brennan offers several reasons for not making voting mandatory. 

-Political scientists find that most citizens are badly informed. 

-Citizens appear to make systematic mistakes about the most basic issues in economics, political science, and sociology. People who would fail econ 101 should not be required to make decisions about economic policy. 

-People who tend to abstain from voting are more ignorant than people who vote. Forcing them to vote would lead to a more ignorant pool of voters, which leads to political candidates who reflect voters’ misperceptions. The end result is bad public policy. 

One objection to this argument is that the disadvantaged, the poor, the unemployed, and the uneducated are less likely to vote than other groups. Some argue that people should be forced to vote so the disadvantaged won’t be taken advantage of. Professor Brennan says this objection relies upon the false assumption that people vote for their own interests. In contrast, political scientists have found over and again that people tend to vote for what they believe to be the national interest. We don’t need to worry about protecting nonvoters from selfish voters. Instead, we should worry about whether voters will invest the time to learn which policies really serve the public good.

According to Brennan, bad decisions in the voting booth contribute to bad government; needless wars; homophobic, sexist, and racist legislation; lost prosperity; and more. While all citizens should have an equal right to vote, someone who wants to abstain from voting because he doesn’t feel he knows the right answers—or for any other reason—should be allowed to do so. Brennan concludes that mandatory voting guarantees high turnout but not better government.

 

If mandatory voting would not helpful, then refraining from voting could should be seen as an alternative. [See my previous posts here, and here.]

EPJ's Bob Wenzel has 13 quotes to justify non-voting:

1. If voting changed anything, they'd make it illegal. --Emma Goldman 

2. The difference between a democracy and a dictatorship is that in a democracy you vote first and take orders later; in a dictatorship you don't have to waste your time voting. --Charles Bukowski 

3.Perhaps the fact that we have seen millions voting themselves into complete dependence on a tyrant has made our generation understand that to choose one's government is not necessarily to secure freedom.--Friedrich August von Hayek 

4. Why do the people humiliate themselves by voting? I didn't vote because I have dignity. If I had closed my nose and voted for one of them, I would spit on my own face. --Oriana Fallaci 

5. Voting for the lesser of two evils is still voting for evil. Next time, go all out and write in Lucifer on the ballot --Jarod Kintz, 99 Cents For Some Nonsense 

6. Democracy is a pathetic belief in the collective wisdom of individual ignorance. ― H.L. Mencken 

7. Don't vote, it only encourages them. - - Old anarchist saying 

8. Democracy means simply the bludgeoning of the people by the people for the people. - - Oscar Wilde 

9.Representative government is artifice, a political myth, designed to conceal from the masses the dominance of a self-selected, self-perpetuating, and self-serving traditional ruling class. ― Giuseppe Prezzolini 

10. Individual rights are not subject to a public vote; a majority has no right to vote away the rights of a minority; the political function of rights is precisely to protect minorities from oppression by majorities (and the smallest minority on earth is the individual). --Ayn Rand 

11. I have never voted in my life...I have always known and understood that the idiots are in a majority so it's certain they will win. --Louis-Ferdinand Celine 

12. No matter whom you vote for, the Government always gets in. --Unknown 

13. You want to know about voting. I'm here to tell you about voting. Imagine you're locked in a huge underground night-club filled with sinners, whores, freaks and unnameable things that rape pitbulls for fun. And you ain't allowed out until you all vote on what you're going to do tonight. You like to put your feet up and watch "Republican Party Reservation". They like to have sex with normal people using knives, guns, and brand new sexual organs you did not even know existed. So you vote for television, and everyone else, as far as your eye can see, votes to fuck you with switchblades. That's voting. You're welcome. --Warren Ellis, Transmetropolitan, Vol. 3: Year of the Bastard

I would add a 14th reason: It's not worth to risk one's life or limb to engage in a charade where the risk of political violence is high during election day.

Video: Explaining The Tyranny of the Majority

Should majorities decide everything?

That's the question dealt by Duke University Professor Mike Munger in the following video at the LearnLiberty.org (thanks to Tim Hedberg for the video)

A synopsis from LearnLiberty.org

Under a democratic system of government, how is an individual protected from the tyranny of the majority? According to Professor Munger, democratic constitutions consist of two parts: one defining the limits within which decisions can be made democratically, and the other establishing the process by which decisions will be made. In the United States Constitution, the individual is protected from majority decisions. Professor Munger warns, however, that these protections are slowly being stripped away as American courts of law fail to recognize the limits of what can be decided by majority rule. Professor Munger uses the case of Kelo v. New London to illustrate the dangers of confusing majority rule with a democratic system.

It is important to note that the lessons from the above doesn't apply just to the US but has been universal through modern political institutions. For instance, Europe's unfolding crisis has substantially been influenced by the rule of the majority channeled through the populist welfare state.

In the Philippines, such dynamic has been evident through Pork Barrel "personality" based politics.

Yet all one has to do is to look at how media and politicians shapes public opinion. Even trivial events have been sensationalized to bring about political importance. Events are always projected to appeal to the majority's emotions subtly intended to mold and manipulate the public's sense of social morality e.g. collectivism via "selfless" nationalism "para sa bayan", which have been and will be used as basis for legal mandates premised on the rule of the majority.

The tyranny of the majority as the great Professor Ludwig von Mises warned, (Theory and History p. 66-67)

If public opinion is ultimately responsible for the structure of government, it is also the agency that determines whether there is freedom or bondage. There is virtually only one factor that has the power to make people unfree—tyrannical public opinion. The struggle for freedom is ultimately not resistance to autocrats or oligarchs but resistance to the despotism of public opinion. It is not the struggle of the many against the few but of minorities—sometimes of a minority of but one man—against the majority. The worst and most dangerous form of absolutist rule is that of an intolerant majority

In short, the ethical tenet embraced by democratic politics has been "Thou shalt not steal, except by majority vote". People essentially lose their "rationality" when they become overwhelmed by Groupthink dynamics applied to politics.

Importantly, the tyranny of the majority is just but one phase of the harsh political reality. Democratic politics has largely been about the rule of the political minority who uses and manipulates the majority as an instrument to acquire their self interested goals.

So democracy is essentially an illusion where the majority rules but through the palms of the privileged politically mandated minority.

Myth of the Greater Good: Philippine Government to ‘Blast’ Illegal Settlers for Flood Project

Recently I quoted Wendy McElroy’s the Myth of the Greater Good.

Yesterday’s headline news would seem like a great example

From Yahoo.com

The government is prepared to "blast" houses and other illegal structures along riverbanks and waterways if inhabitants refuse to transfer to safer areas, Public Works and Highways Secretary Rogelio Singson said yesterday.

Singson said President Benigno S. Aquino III has authorized the use of force to remove obstructions in the tributaries in Metro Manila and nearby provinces, citing the government's "political will" to implement its P352-billion flood control and mitigation program.

He said the government plans to relocate around 190,000 illegal settlers in the water channels as part of its efforts to reduce floods and minimize casualty during stormy weather.

"I just received instructions from the President that if push comes to shove, we will have to blast the houses if they don't leave within a certain period," Singson said in a Palace press briefing after presenting the flood control master plan to the President.

Political priorities that cater to the alleged “greater good” as shown in the above are reactive, presumptive, short term oriented and populist. Such also demonstrates the innate nature of the state.

The usual stereotyped responses by the government to fleeting immediate popular concerns are short term oriented, where the typical solution centers on throwing of more money at the problem, more regulations or prohibitions and or more taxes.

Never mind that the past centrally planned flood projects have been ineffective. Nobody questions if such fiascos have mainly been consequences of the knowledge problem and of the fragility of central planning operating on a highly complex environment. Everybody has been made to superficially think or believe that such blemishes have been mainly about the lack of money and or mismanagement and of the supposed necessity of government action.

So to address these, for politicians and the bureaucracy, such failures require even grander and more lavish projects. Of course these will be accompanied by the presumptions of expertise.

And anything that obstructs on their visions has to be met by force. Since environmentalism has been today’s politically correct theme, thus illegal settlers or squatters have become targets for coerced actions.

The so-called poor, whom were frequently used as convenient rationalizations for raising taxes, have been transformed into objects of political wrath.

Political priorities are dynamic. The shifting nature of government’s attention greatly depends on popular circumstances which dominate the headlines or which reflect on the public’s opinion.

A few months back, the public has been mesmerized with territorial claims dispute. And with calls for populist nationalism, the government’s response has been to increase their budget with implicit popular approval. According to globalsecurity.org, the Armed Forces modernization bill that would add 75 billion pesos ($1.8 billion) for defense spending over the following five years to acquire more weapons, personnel carriers, frigates and aircraft. Yet all such increases in military spending will hardly bolster the nation’s defense or do anything substantial to address the so-called controversial regional dispute.

Instead what these does is to pressure taxpayers into supporting non productive activities which will be used against them.

In the future, should there arise other popular immediate concerns such as natural calamities, e.g. earthquakes or tsunamis or others, expect the response to be the same—throw money at the problem, and wish or hope for their success.

Current political obsession over the environment comes in response to the monsoon rain flooding where popular opinion has been shaped by flawed ideas of environmental experts. One of whom has even blamed economic growth and urbanization as responsible for the current disasters.

Never mind if the citizens of the metropolis have shown increased wellbeing from economic development (table from NSO).

For the environmentalist religion, the argumentative framing has been to put up a strawman and beat them down.

The thrust of the environmental nirvana fallacy extrapolates that we should remain poor so as to allegedly “save the environment”. Yes, use one event (fallacy of composition) to highlight the need for socialist interventionist misanthropic (anti-people) policies by ignoring all other important factors.

High approval ratings thus becomes a license for political boondoggles premised on the supposed omniscience of “experts” whose reasoning can’t even pass the logical rigors of economics.

High approval ratings also mean that current policies have been designed based on the outcome most preferred by the median voter—Median Voter theory or populist politics.

Yet politics has always been a zero sum or even a negative sum activity.

So the Philippine government has turned the heat against the illegal settlers or squatters whom incidentally are mostly creatures of the state through the decriminalization of squatting or the Lina Law. The immoral statute has encouraged rampant squatting which has mostly been used by local politicians for election purposes.

Never mind too that despite the immorality of the actions of the illegal settlers who were mostly incentivized by law and became instruments of politicians, these people still have natural rights enshrined by Article 3 of the Philippine 1987 constitution (hat tip my beloved daughter) which holds that

No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.

“The government is prepared to "blast" houses and other illegal structures” signifies that the privileges of the natural rights of life, liberty, or property only belong to the political class and to those designated by them. All the rest are standing vassals of the state and whose lives are seen merely as statistics.

This also shows that the nature of the state is institutional violence, such that violence and the threat of violence can be used indiscriminately, especially targeted against their own citizens, depending on the caprices of those that wield them.

As the great Professor Ludwig von Mises explained,

State and government are the social apparatus of violent coercion and repression. Such an apparatus, the police power, is indispensable in order to prevent antisocial individuals and bands from destroying social cooperation. Violent prevention and suppression of antisocial activities benefit the whole of society and each of its members. But violence and oppression are none the less evils and corrupt those in charge of their application. It is necessary to restrict the power of those in office lest they become absolute despots. Society cannot exist without an apparatus of violent coercion. But neither can it exist if the office holders are irresponsible tyrants free to inflict harm on those they dislike.

In reality, both illegal settlers and the threat of violence against them, to justify the administration’s new pet flood project, signify ethically as two wrongs which do not make right.

Yet for the current crop of politicians, high approval ratings translates to political superciliousness and the license to conduct political repression which elevates the risks of a tyrannical rule.

History shows us of the myth of the rational voter where people junk rationality in terms of politics to support “systematically biased ideas concerning economics” or widespread social ideas grounded on economic ignorance.

Populist politics have been premised on what people want to hear rather than what they need to hear.

Nazi chief Adolf Hitler’s popular rise to power should be a magnificent example. Chart from Spiegel Online

At the end of the day, the “greater good” is in essence the bamboozling of the gullible public using feel good political themes, for them to support the self-interests and the priorities of the political class coursed through institutionalized violence.

The Anatomy of Rent Seeking: China Edition

Rent seeking is simply the manipulation of the social or political environment in order to obtain wealth through monopoly privileges (Wikipedia.org). Such actions usually comes in the form of subsidies, various political concessions and or regulations which works to prevent free market competition.

The following controversial article from Bloomberg (which reportedly has been censored in China, according to Zero Hedge) gives an example.

Bloomberg: (bold emphasis mine)

Xi Jinping, the man in line to be China’s next president, warned officials on a 2004 anti-graft conference call: “Rein in your spouses, children, relatives, friends and staff, and vow not to use power for personal gain.”

As Xi climbed the Communist Party ranks, his extended family expanded their business interests to include minerals, real estate and mobile-phone equipment, according to public documents compiled by Bloomberg.

Those interests include investments in companies with total assets of $376 million; an 18 percent indirect stake in a rare- earths company with $1.73 billion in assets; and a $20.2 million holding in a publicly traded technology company. The figures don’t account for liabilities and thus don’t reflect the family’s net worth.

No assets were traced to Xi, who turns 59 this month; his wife Peng Liyuan, 49, a famous People’s Liberation Army singer; or their daughter, the documents show. There is no indication Xi intervened to advance his relatives’ business transactions, or of any wrongdoing by Xi or his extended family.

While the investments are obscured from public view by multiple holding companies, government restrictions on access to company documents and in some cases online censorship, they are identified in thousands of pages of regulatory filings.

The trail also leads to a hillside villa overlooking the South China Sea in Hong Kong, with an estimated value of $31.5 million. The doorbell ringer dangles from its wires, and neighbors say the house has been empty for years. The family owns at least six other Hong Kong properties with a combined estimated value of $24.1 million.

Standing Committee

Xi has risen through the party over the past three decades, holding leadership positions in several provinces and joining the ruling Politburo Standing Committee in 2007. Along the way, he built a reputation for clean government.

He led an anti-graft campaign in the rich coastal province of Zhejiang, where he issued the “rein in” warning to officials in 2004, according to a People’s Daily publication. In Shanghai, he was brought in as party chief after a 3.7 billion- yuan ($582 million) scandal.

A 2009 cable from the U.S. Embassy in Beijing cited an acquaintance of Xi’s saying he wasn’t corrupt or driven by money. Xi was “repulsed by the all-encompassing commercialization of Chinese society, with its attendant nouveau riche, official corruption, loss of values, dignity, and self- respect,” the cable disclosed by Wikileaks said, citing the friend. Wikileaks publishes secret government documents online.

A U.S. government spokesman declined to comment on the document.

While inequality is an innate feature of the marketplace, it is even worse when political access and privilege drives these.

Again from the same Bloomberg article:

Increasing resentment over China’s most powerful families carving up the spoils of economic growth poses a challenge for the Communist Party. The income gap in urban China has widened more than in any other country in Asia over the past 20 years, according to the International Monetary Fund.

“The average Chinese person gets angry when he hears about deals where people make hundreds of millions, or even billions of dollars, by trading on political influence,” said Barry Naughton, professor of Chinese economy at the University of California, San Diego, who wasn’t referring to the Xi family specifically.

Read the rest here

Realize that when politicians and their followers peddle arguments based on “noble sounding” or “feel good policies” such as self sufficiency, nationalism, anti-foreign, currency manipulations-trade deficits, the need for political spending to generate employment (make work bias) and etc.., they are preaching of mercantilism and protectionism which tacitly promotes their interests and NOT of the consumers or of the “people”.

The ultimate beneficiaries of interventionists policies, like the above, are the powers that be.

Interventionism is the essence of rent-seeking politics or crony capitalism.

The rent seeking political economy is a universal phenomenon. The greater share of the political influences on the economy, the more economic opportunities are driven by rent seeking. This includes the Philippines. All you’ve got to do is to OPEN your eyes, use common sense and stop listening to sycophants and the institutional propaganda machines.

Politicians hardly practices on what they preach, as they are focused mainly on generating votes or approval ratings to preserve or expand their entitlements.

In the rent seeking political economy, there are many ways to skin a cat, something which the public can hardly see.

When media and politicians talk about “inequality”, like magicians, they simply are engaged in verbal manipulative framing of the public’s mindset. They deliberately shift the blame on market forces, what in essence are mainly caused by political inequality.

Politics 101: Democracy

Democratic politics isn’t really about equal opportunity to express people’s opinion. Instead it is about the manipulation of the masses by vested interest groups to legitimize power grab.

Austrian economist Bob Wenzel lucidly explains the basics of democratic politics which you won’t hear or read from the mainstream institutions. (bold emphasis mine)

The late mafia leader John Gotti, who understood a thing or two about men, once told his daughter: "Regardless of how much a man tells you about how smart you are, he really has only one thing on his mind. You may see a certain man and think of him as grandfatherly, just remember, he has only one thing on his mind."

There is an analogous situation in the world of politics, no matter how much a politician tells you how he wants to fight for your cause, keep in mind that he has only one thing on his mind: getting or maintaining power.

No matter how well groomed or smooth he looks, no matter how well he delivers his lines, he has only one thing on his mind: getting or maintaining power.

In a democracy, in a two man race, a politician must be concerned with the percentage 50% plus one vote.(In a three man race, it's 33% plus one vote, but to keep things simple I will assume a two man race. In a three man race or more, the general idea is the same, just different percentages.) . To be a successful politician, a politician must look at each and every voter and determine whether that person is going to bring him closer to 50% plus one, and how much closer.

In other words, you as an individual voter are not very important to him. Think, I'm kidding? Try getting an appointment with one of your U.S. senators to discuss some tax loophole you would like for yourself, so that instead of sending 25% of your money to the IRS, you get to use the money on a three month per year trip to the Bahamas, which you then are able to deduct from your tax bill. Go ahead, call your senator now and try and get this done.

If you understand politician math and the importance of 50% plus one vote to a politician, you will understand that individuals, who represent large groups of voters, can get appointments with senators. A Citibank lobbyist, and other bankster lobbyists, are also going to be able to get meetings with senators. They bring money that the politician can use in his campaign that will help him advance toward 50% plus one vote. That's why banksters get tax loopholes and you don't…

Bottom line, it makes no sense for an individual to vote, endorse, or work for any politician, especially if you are a libertarian. Democracies are about power players and divvying up the lucre and power. If on the other hand you some how can deliver a vote of 10% or more because you have a following, you may be able to make a marginal incremental influence in favor of liberty. You won't get much, especially when you will be vying against other power players, who want to grab and take and steal and expand government power, but on a practical level, the mathematics work in that you may be able to get something.

Oh, this isn’t just in the US, but applies universally including in the Philippines.

And here is why politics is not only an utter waste of time but represents a destructive force in society…

Democracy, despite the reverence and lip service placed on "one man one vote", is really about power blocks, get out the vote machines and the power players who control the blocks, machines and money. It has nothing to do with the individual.

The individual is only served away from government. The only chance an individual has to get his unique quirk's met is not from government, where a quirk could never possibly result in a power block to influence government, but in the private property free market society where businessmen are out to serve all--not just the power crazed..

In comparison, unless you are super wealthy, or have a power bloc you can deliver, politics is a waste of time. This is even more the case for the libertarian, since politics is, in the end, mostly the fine art of delivering for the power players by destroying liberty, while talking gibberish about serving the people.

If you buy into the gibberish, you are a sucker.

You are much better off studying about freedom, practicing freedom and writing about freedom, than you are joining and working a political campaign for what ultimately must become a liberty destroying outcome.

I’d rather go on a vacation during election period than be a part of the delusional “one man, one vote” egalitarian society (myth of the rational voter)

Oh by the way, speaking of “one man one vote system”, I recall that there had been more NON-voters during the last or 2010 Philippine presidential election than the votes acquired by the winning candidate, today’s incumbent president. Yet mainstream institutions continually impress upon the public that plurality votes equates to the “madlang people” or to the collective.

Yes politics, abetted by media, have demeaned culture to the point of mangling linguistic content in order to peddle crass collectivism (of course to the benefit of the political class and also of crony media)

Politics indeed is a game of lies and machinations.

Quote of the Day: Rational Ignorance

[P]oliticians trying to select policies that will attract voters know that the voters will put much less energy into trying to make a correct choice than they would when purchasing an automobile or some other item whose shortcomings and advantages will accrue to them alone. The voters, therefore, are likely to be badly informed and may favor a politician or policies that are directly contrary to their interest. From the standpoint of the individual candidate, what is important is what the people want given their perception of the value of their vote on the outcome and the cost of becoming informed, not what they would want if they were better informed.…

But when I vote I am aware that my vote will have almost no effect on the kind of policies I shall get. The result occurs because the policies and politicians chosen will be determined to a much greater extent by the votes of other people. Politicians once again know this, and hence attempt to design policies which shall attract ill-informed voters.

That’s from Gordon Tullock’s 2005 collection, The Economics of Politics, which is Vol. 4 of The Selected Works of Gordon Tullock page 36 as quoted by Professor Don Boudreaux at the Café Hayek.

This is so very much relevant or applicable to Philippine politics.

Controversial issues brought to the table by the incumbent administration have essentially pandered to public’s perceived sense of value namely “anti-corruption” or “nationalism”.

Little has there been the realization that these actions have not only been designed for the coming 2013 elections, but most importantly, meant to subtly annex or to expand political power, by means of appealing to the popular sentiment or values of the "ill informed" voters, for personal goals.

It is as simple as saying that if there has been any one trait this administration has been adept at, it has been in the dexterous handling of voter's rational ignorance to their advantage.

US Spent $72 Billion for Climate Change Since 2008

Writes Professor Gary North at the LewRockwell.com,

Remember when global warming was called global warming? You know: back in 2001, before a decade elapsed in which there was no measurable global warming.

It’s not called global warming any longer. That was just too embarrassing, because there hasn’t any global warming for a decade. This stable temperature has taken place, despite the fact that worldwide emissions of carbon dioxide are higher.

“In light of the 2010 data, global carbon dioxide emissions have risen by fully a third since the year 2001, yet global temperatureshave not risen during the past decade. Global warming activists argue that carbon dioxide emissions are the sole or primary factor in global temperature changes, yet global temperatures show no change despite a 33% increase in global carbon dioxide emissions.”

So, the anti-warmers changed tactics. They invented a new threat: climate change.

Mankind is responsible for climate change, we are told. Therefore, the U.S. government is required to spend money to combat it, all over the world. It has no jurisdiction outside the United States, but that has not dimmed the hopes and plans of warmers

The U.S. government has spent over $72 billion to combat climate change since 2008.

This has failed. The climate keeps changing. Sometimes it’s warmer. Sometimes it’s cooler. It it refuses to cease changing.

This means that taxpayers must still be compelled by the government to do their fair share.

This means $72 billion down the sinkhole (wasted productive capital), $72 billion added burden for US taxpayers, and $72 billion subsidies for the benefit of Obama’s green energy cronies.

Abetted by the constant barrage of propaganda by mainstream media aimed at convincing the median voter, vested interest groups, who benefit from political privileges, have been screaming for more.

Quote of the Day: Myth of the Rational Voter

Public outrage is an unreliable mechanism for regulating government because the incentives to be accurately informed about public affairs are so weak. Voters often support policies that are based on faulty economic logic. The task of being well-informed about the relative costs of public policy is beyond human capabilities anyway. Since neither the public nor politicians can be vigilant regarding modern bureaucracies, the only "solution" to these problems is to restrain bureaucrats with rigid rules.

That’s from D.W. MacKenzie at the Mises.org

Greece Crisis: The Lehman Moment Hobgoblin

But while, as in the lynch mob, the majority can become actively tyrannical and aggressive, the normal and continuing condition of the State is oligarchic rule: rule by a coercive elite which has managed to gain control of the State machinery. There are two basic reasons for this: one is the inequality and division of labor inherent in the nature of man, which gives rise to an "Iron Law of Oligarchy" in all of man's activities; and second is the parasitic nature of the State enterprise itself. Murray N. Rothbard For a New Liberty: The Libertarian Manifesto

Some have suggested that the ongoing crisis in Greece could epitomize the counterpart to the Lehman episode, which triggered global meltdown contagion in 2008.

As Olli Rehn, European Union Economic and Monetary Affairs Commissioner said in a recent Bloomberg interview[1]

“We have always been concerned of contagion,” Rehn said. “One of the achievements over the past one-and-a-half years has been that we have been able to prevent a financial meltdown in Europe. We have been able to avoid a Lehman Brothers kind of catastrophe on the European soil. And moreover, we have been able to contain the crisis to the three countries now under the program,” he said.

This rabid fear of fractional reserve banking induced debt deflation represents as only one of the major influences guiding the current path of policymaking. It’s partly ideological.

But most importantly this signifies as the implicit desire to keep the current unholy central bank-government-banking system cartel or patronage system intact.

Proof of this is that the exigency to conduct bailouts has almost been representative of the creditor nation’s banking system exposure to crisis affected economies[2]

Any signs that would risk the survival of this tripartite global political arrangement would translate to urgent or contingent collaborative actions, despite political differences.

Faced with the risks of a Greek default, the ECB and Germany have been working on a compromise[3]. China’s recent declaration to help shore up Eurozone bonds or the bailout of Greece[4] has also demonstrated such tight kinship on a global scale.

The current framework of socio-political institutions has been built around such symbiosis. It’s a relationship based on financial repression.

And unknown to most, the political elites will fight to maintain this status quo despite the unpopularity on the constituency.

Politicians essentially know that they can manipulate voters.

Voters have mostly elected leaders for what they stand for. But once in power, people cannot or will not be able influence the politicians’ actions, which usually depart from their pre-election promises.

And this is what most experts don’t get.

So political elites will come up with usual hobgoblins as the “Lehman Moment” to ensure that accompanying policies would translate to the preservation of their political privileges.

Misdiagnosing Greeces’ Problems

It would be misplaced to argue that the survival of the Euro depends on “political and fiscal union” as celebrity guru Nouriel Roubini writes[5].

Had this been true, then the Soviet Union would have still existed. The USSR had a centralized monetary system, political and fiscal union but got dissolved.

The current problems of the Euro have not been because of the lack of centralization but because of it.

Political spending has reached levels whereby the productive sectors of the society can’t afford to pay.

As exhibited in the above charts, government spending growth[6] and a nation’s ability to pay[7] has been tightly correlated.

Thus, the political economy of institutional centralized redistribution (or free lunch policies) backfires once economic imbalances has reached the “tipping point”.

Essentially the Bismark-Keynesian concepts of welfare economics have reached a point of having to boomerang. We are at this turning point.

Thus the key to restoring competitiveness is to REVERSE the fundamental cause of such imbalance—government spending or dismantle or reduce welfarism.

The unfolding Greece crisis should be a reminder of the unviability of false promises and serves as preview of what we should expect once a major bubble bust emerges—but this time at a much larger scale.

Deflation Charade

I read of some comments that suggests of a deflation risk from Greece’s insistence to keep up with the “fiscal austerity” and that Greece would greatly benefit from exiting the Eurozone where she can devalue at will.

And that by devaluing this risk “flooding the Eurozone with ‘cheap’ goods”.

Despite the current crisis, Greece has NOT been suffering from deflation but from stagflation as shown in the charts from tradingeconomics.com[8]

Yet devaluation would not solve Greece’s economic predicament because her debt are mostly denominated in Euros.

An exodus from the Euro coupled with devaluation would only mean Greece would need more drachmas to pay for Euro based obligations unless she can convert these to drachmas ahead of devaluation.

In addition, it is such a nonsense to believe that cheap currency equals export greatness. If this snakeoil economics is to believed then Zimbabwe would have been an export titan, the Philippines would have also been one of the most prosperous.

Besides, if the riots in Greece has been about maintaining political entitlements, then this won’t lead to increased investments and expansion in productive ventures, but rather, this increases the risks of a European version of Dr. Gono's Zimbabwean policy, once Greece does exit from the Euro.

To believe that banking or fiscal austerity based deflation would cause the Euro’s demise is loopy.

Throughout history, currencies usually die from hyperinflation or from wars[9]. Reducing the prospect of war has been one of the main pillars why the Eurozone Union was put to existence[10]. This leaves hyperinflation as the biggest threat.

The Mises moment is when a critical choice will have to be made between policies that could lead to hyperinflation or mass deflation.

I don’t think that today’s condition would warrant such decisions yet as central banks still have some leeway to move about.

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[1] Bloomberg.com Rehn Sees Markets Misreading of EU Leaders’ Intentions on Greece, June 16, 2011

[2] Economist.com Piggybacking, Daily Chart, April 15, 2011

[3] Wall Street Journal Schaeuble Calls For ECB Compromise On Greece, Boosting EFSF-Spiegel, June 19, 2011

[4] See China to Assist in the Bailout of Greece, June 18, 2011

[5] Roubini Nouriel, Could the Eurozone Break Up? June 18, 2011

[6] Buttonwood’s Notebook Spending too much or taxing too little? Economist.com April 4, 2011

[7] CreditWritedowns.com Five Misconceptions Squashed, June 2011

[8] Tradingeconomics.com Greece Indicators

[9] Dollardaze.org, Demonetized Currencies

[10] See Buy The Peso And The Phisix On Prospects Of A Euro Rally, June 14, 2010