Category Archives: economics

Independence Day: Resurgence

If you garnered any enjoyment from the first Independence Day or if you’re in the mood for a state of the art alien invasion film with some really enjoyable performances, you could do a lot worse than Resurgence.  The film succeeds because it gives you exactly what it promises: a band of heroes who join together to save human civilization from another extraterrestrial threat of extermination. Of course, the threat is twice as bad as before.  

The story picks up 20 years after the events of the first film and rejoins us with most of the original characters. Several young characters are added to the mix in order to fill the void left by the absence of Will Smith. All of the countries have banded together to rebuild civilization after being nearly vaporized by aliens the first time around. Thanks to harvested alien technology, the United States have built a global super state with a futuristic, alien-grade military defense apparatus that extends from the earth to the moon.  

This film has been described in various reviews as an appeal to nationalism and patriotism, but it’s more than that. It’s really War of the Worlds repurposed as a multicultural, globalist fantasy and a Keynesian wet dream. This film is yet another variation on the gleaming, futuristic, techno-utopia fantasy that can be achieved through abject servitude to the State and by building a culture of cradle to grave militarism. The previous alien invasion may have nearly wiped out civilization, but it provided the ultimate opportunity to enact the biggest economic stimulus ever! It’s quite literally Paul Krugman’s prescription for economic prosperity writ large.  


Familial bonds are largely non-existent for the younger characters, but when they are introduced, they exist mostly within the hierarchy of the State. Vivica Fox returns as Jasmine Hiller who is both mother of Jessie Usher’s Dylan Hiller and some kind of high ranking government official.  She lasts long enough to convey maternal pride in her top gun military progeny and die a tragic death amidst the alien devastation.
The technology is so advanced, that one can only imagine that the Platonist social engineers were finally given free reign to build a society of super soldiers whose only devotion is to the State. Naturally, it’s a multicultural paradise with total gender equality.  Every race and culture gets along harmoniously, the women are every bit as capable as the men in every pursuit, and when the chips are down, humanity joins hands to fend off extinction one more time. Even the African communist militants seem like really cool guys. 

But enough of all this analysis.  What about the UFOs and worldwide demolition? Independence Day made its mark by giving us massive alien ships with devastating weapons, and just as one would hope, Resurgence doubles down on the massiveness.  The film wants to overwhelm you with its scale, and it more than delivers. The alien mothership is so big, it plants itself on the surface of the earth like a giant hubcap.  

When it comes to defeating the aliens, the film settles for yet another variation on what has become a completely shopworn cliché: destroy the leader and the minions lose their agency.  Sadly, the human alliance doesn’t differ from the aliens in this respect.  All of the forces rally and are emboldened to fight upon hearing President Whitmore’s grizzled but rousing call to arms.  

Though I doubt it was the filmmakers’ intention, I propose that this film was also a stealth commentary on modern feminism. Everyone will undoubtedly find it so empowering and progressive that Sela Ward plays the current president and gives the command to initiate the attack on the alien vessel, but that’s a side show. The alien civilization is essentially a matriarchy that resembles a highly advanced insect colony with a queen who controls and directs the worker soldiers. Once the queen is killed, all the subordinate aliens lose their will to fight. If an advanced civilization capable of enormous and highly coordinated feats of starship construction, weapons systems development, and intergalactic invasion and occupation is ruled by a woman and all of the subordinate workers are so emasculated that they’re forced to dedicate the entirety of their existence to a never-ending pursuit of intergalactic conquest, that doesn’t speak too highly of life under matriarchy.  

Ultimately, the film is supremely entertaining. It knows that its first job is to be a rousing blockbuster alien invasion movie and it succeeds wildly at this task. But every major Hollywood film exists to transmit progressive editorial of one form or another, and Independence Day: Resurgence is certainly no exception. 

Requiem for Marx

Despite the epic failures of socialism throughout the world, the Left throughout the West has held fast to its perverse and irrational idolatry of the philosophy of Karl Marx.  In America, The Communist Manifesto is the most widely taught economics text in university.  The bookstores of the most elite and prosperous communities are stocked with copies of Das Kapital. Media elites openly trumpet socialism and socialist regimes in major publications without remorse. Socialists now unironically wave banners of Stalin and Soviet flags in public parades and protest rallies. But no matter how spectacularly socialism fails, the Left have mastered the art of apologia when it comes to the writings of Marx. Somehow these failures cannot be attributed to Marxist doctrine, are handwaved away as merely the unfortunate consequences of bad actors who either misapplied principles or were just despotic malefactors to begin with. Socialists contend either that socialism has never been properly attempted or hold up the welfare states of Scandinavian countries as model societies to which to aspire with no regard for history or market economics. Even worse, Marx’ analysis of capitalism continues to be accorded unwarranted deference, and his quasi-religious promises of earthly plenitude and social harmony continue to hold sway in the consciousness of the Left.

Whatever the reasons for the maddening endurance of this doctrine, what is needed is a stern and thorough repudiation of Marxist doctrine in the court of public opinion.  Preferably, before its adherents do any more damage than they already have done. 

Though others have set out to stamp out the mental cancer of Marxism, there is perhaps no refutation more definitive than Requiem for Marx. Edited and prefaced by former Soviet economist, Yuri N. Maltsev, Requiem for Marx sets out to disassemble and dismantle Marxism root and branch. Comprised of essays by the most notable thinkers in the Austrian tradition, Requiem for Marx lays waste to every facet of this toxic, but seductive ideology. 

Mr. Maltsev’s introduction all by itself should be sufficient to disabuse the average Occupy Wall Street proponent of any fascination with socialism, but it is merely a prelude to the battering ram of truth which follows.  Maltsev describes being indoctrinated to accept Marxist principles from a very early age up to the massive abuses, widespread corruption, indifference, repression and deception he witnessed from within the highest echelons of the Gorbachev regime. While Gorbachev enjoys a reputation in the minds of the Western public as a forward-looking politician, Maltsev paints a far less charitable portrait of a party apparatchik who lacked any intellectual curiosity, and held fast to his belief in socialism despite the large scale collapse happening throughout the Soviet Republic. Most importantly, Maltsev reminds us that rather than being some misapplication of principles, the USSR was, in fact, a sincere and faithful attempt to apply and implement Marxist doctrine.  Put that in your pipe and Bern it, Occupiers.

The chapter written by Hans-Hermann Hoppe is revelatory because he illustrates the parallels between the Austrian and Marxist analysis of exploitation. Marxists and Austrians both posit the existence of a predatory ruling class, but Marxists got it completely wrong by incorrectly pointing the finger at capitalists and producers. Hoppe draws a critical distinction between those who produce and exchange through voluntary contract and the homesteading principle versus those who extract wealth through involuntary and coercive means (i.e. the State). The former are the productive classes and the latter are the parasites.  

Gary North’s examination of Marx’ personal life, spending and borrowing habits, academic output, financial dependence, and absence of any real employment history is absolutely essential because it exposes Marx as the dilettante that he was. The fact that Marx is so heavily favored by pampered, bourgeois academics is sadly appropriate because that’s exactly what Marx himself was.  Not only was he born into wealth and privilege, he married into wealth and privilege, and managed to squander a fortune that easily placed him in the 19th century 1%. Not exactly the hardscrabble life of a working-class prole. Boasting an exhaustive set of original and biographical sources, North paints a picture of a classically narcissistic and predatory personality. Marx was deeply vindictive and spiteful towards opponents both real and perceived, demanded compliance from everyone around him, lived off the patronage of Engels and spent well beyond his means, fathered illegitimate children despite having no gainful employment, and proffered no positive theory of socialism while penning volumes of seething criticism of capitalism. Most tellingly, Marx essentially stopped publishing at age 49, and North argues that this was because Marx had reached an intellectual dead end.  For someone who’s entire theory of exploitation hinged on the idea of class exploitation, the fact that he never bothered to define “class” until the third volume of Das Kapital says quite a bit about the superficiality of his thought. North delivers a stinging rebuke to the political parasites, celebrity socialists, media water carriers and academic wankers who replicate Marx’ cult of personality, venerate his toxic swill, and telegraph their phony concern for the working man while luxuriating in the confines of their gilded fiefdoms. With this chapter alone, Gary North has driven a permanent stake into the heart of the myth of Marx as a Champion of the Working Class.

David Osterfeld’s critique of the Marxian taxonomy of historical modes of production and theory of history completely annihilates the validity of any claim that Marx makes on his system of thought being a genuinely scientific framework.  Throughout his work, Marx makes repeated references to the allegedly irreconcilable contradictions of capitalism, but it appears that few true believers in Marxist doctrine examine the contradictions within the Marxist theory itself.  Among the many confused and confusing notions which emanated from his addled mind, his theory of the inevitability of socialism receives a well deserved thrashing. According to Marx, the material forces of production develop without interruption like some sentient Borg-like hive mind which simultaneously gives rise to the exploitative bourgeois superstructure, improves material conditions and immiserates the proletariat all at once. Individual initiative and innovation play no role in his theory nor does the increased satisfaction that follows from the ongoing material improvement for the vast majority of the population. He simply presents the development of a revolutionary proletarian consciousness laboring under the crushing bootheel of the capitalist machine as an unfalsifiable a priori proposition. Most importantly, Osterfeld illustrates how Marx alternates between a sociological definition of capitalism and an economic one which, if properly distinguished, would have made a clearer separation between the mercantilist interventions of the State and the voluntary nature of market transactions. 

Picking up where Gary North and Hoppe left off, Ralph Raico uncovers the classical liberal roots of the theory of class exploitation and illustrates how Marx perverted the idea and propagated a wildly distorted vision of reality.  Marx cribbed his theories of class struggle from early classical liberal thinkers, François Guizot and Augustin Thierry, but by the end of Engel’s life, the role of the individual in the development of historical materialism had been nearly erased. Through the liberal journal, Le Censeur Européen, Thierry, Charles Comte, and Charles Dunoyer developed the doctrine of Industrialisme, or Industrialism. These thinkers put commerce at the center of society and asserted voluntary exchange as the true engine of virtue, industry, and innovation.  Most importantly, these men also drew critical inspiration from fellow Frenchman and economic theorist, Jean-Baptiste Say.  At the center of the theory of Industrialism was a harsh rebuke to the intervention of the State in economic affairs. All of these theorists correctly identified the State and its enablers as the idlers, exploiters and parasites. Marx and his followers ended up turning this analysis on its head and pitting workers against capitalists while assigning an unwarranted illusion of virtue to the expropriative power of the State.  

Coming in for the coup de grâce is the late, great Murray Rothbard. Drawing from a mind boggling collection of original and secondary sources, Rothbard argues that the Marxian pursuit of Communism was, in fact, religious in nature. Rothbard argues that not only was the Marxian pretense of secular scientific rationalism a pathetic farce, but his work had roots in religious millennarian prophecy which seeks a Kingdom of God on Earth.  Just as Marx’ economic thought was built upon the foundations of British Classicism, his pursuit of communism was merely a repurposing of the work of 16th century religious zealots who also saw inequality as a moral sin and sought redress through confiscation and conscripted labor. Rothbard focuses in particular on the first large scale attempt at Communism in Europe based on the teachings of the megalomaniacial eschatological Anabaptist, Thomas Müntzer.  Though Müntzer’s initial attempt at Anabaptist Communism in the city of Muhlhausen was another abject failure resulting in mass death and his ultimate execution at the hands of the German monarchy, his ideas carried on and were implemented by others to similarly disastrous results. The zealots who picked up the torch of eschatological Anabaptist Communism eventually gravitated to the city of Münster, and under the leadership of another set of proto-Lenins, Jan Matthys and Jan Bockelson, the first major experiment in socialist dictatorship was imposed.  All the features that defined every modern Communist dictatorship were present in the Münster experiment. Private property was confiscated, labor was coerced, disobedience was met with capital punishment, and the lionshare of the produce of society was reserved for the self-appointed elites. 

Rothbard also points out that Marx was a Christian in his youth before he adopted Hegelianism as a college student and his megalomaniacal ambitions, nihilism and abject hostility to humanity were present in his early attempts at play writing and poetry. 

Among the many failures of logic in the Marxian framework is his inability to reconcile market prices to the value of labor inputs. The entire edifice of Marxism rests on the premise that market prices must reflect the value of labor inputs and that the relationship between capitalist and laborers is exploitative by nature. Rothbard neatly emphasizes that Marxists have neither adequately responded to Eugen Böhm-Bawerk’s critique of this aspect of the Marxian system nor come to grips with the insights of the Marginalists.  

Rothbard correctly observed that ideas are notoriously hard to kill even if they’re demonstrably bad ideas like Marxism.  The fact that Marxism forms the backdrop of thought for contemporary sociology, the new secular religion of the Left, is unsurprising. Predictably, the loudest advocacy for socialism is coming from the academic class via gender studies, critical race theory and other variations in postmodern social analysis. These new school socialists have simply put a new veneer on an old formula.  The New Kingdom of God on Earth will be achieved by eradicating racism and sexism. And of course, the age old gripe against inequality of outcomes must be rectified through confiscation and redistribution (aka “economic justice”). There’s no doubt these secondhand theories emanate from the same poisonous well of thought from which Marxism itself emanates.  

The debate against socialism should have been settled long ago.  Sadly, Marxism has retained its place as the unofficial religion of the Left since the Left has no firm principles and, like their Marxist forebears, have made the State their religion. The fantasy of “equality” and the yearning for a secular morality coupled with a prefab indictment of free market capitalism all conspire to keep Marxism alive. Subsequently, academic con artists, media dittoheads, and political hacks are aggrandized and their pretentious paeans to the proletariat proliferate. Aging Boomers and their patchouli soaked, non-binary, queer positive, trustafarian progeny lured by promises of “social and economic justice” and a sweet Simon and Garfunkel soundtrack regurgitate their braindead slogans like manna from heaven while what remains of the free world marches down the road to serfdom once again.  

Perhaps humanity needs to learn its lessons the hard way by repeating its mistakes a few times. It would be nice if it didn’t have to come to that. Marx and his system have been refuted many times over, and this magnificent collection of essays has earned its rightful place as the final epitaph for a philosophy that’s well past its expiration date. It’s high time that socialists pay attention. 

Bernie Sanders is Wrong

We’re living in dark times, and just about everyone can give you their version of evidence that civilization is on the brink of collapse.  For some, it’s Donald Trump. For others, ISIS.  Choose your preferred harbinger of the End Times.

For me, the person who’s earned my deepest contempt and is the clearest evidence that we’ve reached an absolute nadir and collapse of American principles in politics and culture is the presidential candidacy of Senator Bernie Sanders of Vermont. 

After spending his entire adult life as a political parasite espousing openly Marxist views and sympathies towards brutal Communist dictatorships, Sanders is currently enjoying his fifteen minutes of fame as The Principled Democratic Socialist Who’s Sticking It To The Fat Cats. Despite his highly dubious legislative record which includes support for Clinton’s Kosovo bombing campaign, the 1994 Crime Bill, four Iraq War appropriations bills as well as the notorious boondoggle known as the F-35, Sanders enjoys a largely unquestioned reputation as a politician of spotless virtue and courage. Fortunately, intellectual titan and all around champion of liberty, Tom Woods, has assembled a collection of transcripts from his indispensable podcast which systematically dismantle Sanders’ carefully crafted edifice of would-be moral rectitude and misguided policy prescriptions.  

Sanders’ platform is not even remotely new or innovative, and if anything, is comprised merely of more expansive and bloated versions of pet projects that have been incubating within the Left for decades.  What’s actually new about the Sanders phenomenon is that he’s packaged them into a unified political agenda and is presenting them on a national stage as ideas which belong in the Democratic Party platform.  This is especially interesting and noteworthy given that Sanders has spent his entire political career in DC officially as a self-described Independent, but as a “democratic socialist” in public

Naturally, Sanders and his supporters have gone to great lengths to distance themselves from the undeniable legacy of misery, repression, and economic dysfunction that’s been the hallmark of every socialist regime in history by condescendingly handwaving away any comparison between Bernie’s vision of socialism and the repressive dictatorships of past and present. Bernie doesn’t want Venezuelan socialism, he wants the nice version of DEMOCRATIC socialism like they have in Scandinavian countries!  By invoking the welfare states of Northern Europe, Sweden and Denmark in particular, as irrefutable evidence that socialism is benign and benevolent, Sanders and his loyal Berners consistently and fallaciously argue that these are, in fact, socialist success stories AND that Sanders’ magical campaign promises will produce a comparable or greater outcome here without so much as a shred of evidence on which to base the ludicrous claim or the slightest concern for potentially adverse effects of implementing such an agenda.

Of course, these promises and glib pronouncements are either pathetic, manipulative delusions or outright falsehoods and distortions of reality.  Tom Woods’ magnificent little book walks you through his entire agenda point by point and succinctly illustrates exactly why Bernie Sanders is Wrong.

The book is divided into four sections which cover the central pillars of his agenda: Sanders’ designs on implementing European-style welfare state policies, government subsidized renewable energy, minimum wage, and income inequality. 

Woods starts off by letting out the gas in the hot air balloon of Scandinavian welfare state idolatry.  Johan Norberg lays out a century’s worth of historical context around Sweden’s economic rise which includes a period of 50 years of laissez faire policy which created the prosperity for such a generous welfare state in the first place. The decline in Sweden’s overall prosperity after the implementation of the welfare state is never mentioned by Sanders or his supporters, nor are the policies which are friendlier to business. Norberg also discusses the ways in which the advent of the welfare state destroyed cultural bonds of trust that were forged over decades of organic social cooperation and market driven policy in a country that was, in fact, a white, Nordic monoculture. A fact that’s conveniently omitted by multiculturalists.   Woods chose to limit the scope of his excerpt to Sweden’s economic history and development, but this section could have been further strengthened by some mention of the failure of immigration policies and the collapse of social cohesion which has been hastened by force feeding the population feminism and multicultural social justice politics.

Professor of Economics from Aarhus University, Christian Bjørnskov, unpacks the seemingly ubiquitous myth of Denmark as “the happiest country in the world.” Naturally, the Berners will chalk this up to the size of the welfare state and government mandated benefits, but Bjørnskov provides some sobering perspective. The benefits conferred by the welfare state do not contribute to an individual’s active pursuit of happiness, but simply become baked into the expectations of each citizen that aren’t consciously chosen. Subsequently, it breeds a higher level of entitlement amongst the population as well as a disincentive to produce. Bjørnskov makes a very interesting point about how state mandated 52-week maternity leave creates an artificial incentive for women to become mothers and often diminishes their future employment prospects. He concludes with some fascinating data about how the welfare state disincentivizes actual charity as well as some intentionally neglected liberal policies, like those found in Sweden, which are friendlier to business than the US.

Robert Bryce and Alex Epstein take a sledgehammer to the deathless progressive claims of the necessity of government investment in renewable energy.  Bryce argues that if environmental protection is a priority, then the density of the energy source must be the primary measuring stick.  Outrageous calls for a 20-fold reduction of fossil fuels are little more than a death sentence since renewable energy sources are not even remotely close to filling present or rising energy consumption needs. Epstein tackles the issue from both the moral and empirical perspective and elucidates some critical points that are absent from climate change alarmist script.  Environmentalists consistently agitate for minimizing human impact for non-human life while ignoring positive metrics for humanity that are the direct result of cheap and plentiful fossil fuels. 

Of all the progressive policy myths which have been the most durable, the minimum wage has enjoyed an extraordinarily long life.  Like everything Sanders says, it has tremendous surface appeal because it gives the illusion of expanding prosperity, but the opposite is true. Former DOL economist, Diana Furchtgott-Roth swings a wrecking ball of truth against Sanders’ flimsy claims.  The arguments against minimum wage will be familiar for those who actually investigate economics for 5 minutes, but as the appeal of Sanders attests, rationality and logic has yet to prevail. If you’re truly concerned about the welfare of the poor, then don’t criminalize work for low skill laborers whose labor isn’t worth $15 per hour, and most of all, don’t try to sell low skilled labor as a lifelong career path. The fact that Sanders is peddling minimum wage as a centerpiece of his economic platform shows how bankrupt his agenda is.  For Sanders, creating wage floors on low skill labor and subsidizing college education without regard for what a student actually studies will somehow magically create prosperity. 

Loyola University professor, Thomas DiLorenzo, adds some additional historical insight into the racist origins of minimum wage while bursting the mythology of labor unions as drivers of upward economic mobility.  Progressive era business owners didn’t want to have to compete with firms who could hire cheaper black labor, so they agitated for minimum wages to price them out of the labor market and inhibit black economic upward mobility.  By using the club of the State to criminalize non-union labor, unions make the market less competitive and only enshrine a culture of entitlement and mediocrity. 

Another gaping hole in the Sanders platform mentioned briefly in the book is his disregard for the skill gap that already exists within the US labor force.  While Sanders touts his confiscatory plans for subsidizing every art history and gender studies degrees for middle-class Americans, he ignores the 5mm jobs that are unfilled largely due to a shortage of skilled labor.  Apparently, it’s more important to subsidize college so kids can study The Communist Manifesto and agitate for safe spaces than prepare them for adulthood with marketable skills.

Among the most revelatory chapters is the interview with physician and entrepreneur, Dr. Josh Umbehr.  Dr. Umbehr runs a concierge medical practice modeled on a Netflix/Costco-style membership which covers the general practice medical services people actually need. For a monthly fee, people can gain access to any general practice medical care they need including home, office or online consultations.  He explains how opting out of the ACA’s bureaucratic straightjacket allowed him pursue a business model that lowered costs, increased access and provided a better value for all of his patients.  Just like virtually every other scientific profession, he encountered an antagonistic attitude towards business throughout his education, but ultimately rejected the false dichotomy.

Mark Perry from University of Michigan takes another swing at the seemingly indestructible myth of the so-called gender wage gap. Aside from equally laudable takedowns of this talking point by Christina Hoff Sommers, Claudia Goldin and seemingly countless others, Sanders, the feminist media/academic industrial complex and the Tumblrista Brigade won’t let this die.  It doesn’t matter that women consistently choose different career paths that are less strenuous and less remunerative. It doesn’t matter that the Equal Pay Act of 1963 is already law. It doesn’t matter that women work fewer hours in aggregate.  It doesn’t matter that motherhood plays a major role in a woman’s career choices and ambition.  Sanders flogs this meme because it sounds good and scores “Equality” points with his base. 

Scott Winship, Don Boudreaux, and Grant Phillips round out the book with some excellent discussion of free trade, inequality, and rising living standards resulting from capitalism. Sanders focuses solely on metrics that invoke outrage, greed, and envy while ignoring the affordability and accessibility of technology and consumer conveniences that were inconceivable to previous generations.  The schism between unskilled labor and the acceleration of automation is an issue that warrants further discussion and scrutiny since it tends to validate arguments for universal income and the imminent arrival of the post-scarcity economy amongst the Berners. 

Even if one sets aside all of the failures of morality and logic inherent in Sanders’ agenda, his pursuit of the Democratic presidential nomination seems both deeply opportunistic and fully at odds with his carefully cultivated pretense of principled independence. Beside the fact that he’s carefully avoided throwing any hard punches at Hillary, he’s only embraced the Democratic Party after assiduously avoiding identification with the Democratic Party throughout his entire career in Congress. Why should the Democrats embrace Bernie-come-lately as the leader of their party? If he really saw himself as a political maverick, why would he hitch his wagon to the DNC unless he had no real intention of clinching the nomination in the first place? He blames it on “the structure of American politics”, but not only is this a whiny cop out, it’s contrary to his previous public statements about the necessity of a third party.  It seems he’s only interested in enjoying his cult of personality on the taxpayer dime while tilling the soil for a more overtly socialist tenor in Democratic Party politics.

Bernie Sanders’ candidacy perfectly epitomizes the classic socialist con game; lots of soaring appeals to secular morality, manipulative declamations around “equality”, and promises of bread and circuses which mask a naked hunger for power fueled by a blatant ignorance of and contempt for basic economics. Despite everything, Sanders’ reputation is seemingly beyond reproach to his loyal Berners. By carefully omitting his partisan support for the central bank, warfare and police state and maintaining rigid message discipline, Sanders has very skillfully avoided deep scrutiny from most of the media. The truth is that Sanders doesn’t have a single original idea in his policy toolkit, and his entire agenda should be called by its true name: soft Bolshevism. Thanks to Tom Woods’ excellent little book, he is exposed as the contemptible, parasitic fraud that he is.

What Happened to the 80’s Anti-Apartheid Dream?

image

You got to say I, I, I
Ain’t gonna play Sun City
I, I, I ain’t gonna play Sun City

Steven Van Zandt and a multiracial supergroup, Artists United Against Apartheid, created the anti-apartheid rallying cry heard around the world which played a role in turning public opinion against South Africa’s regime of racial segregation and towards full political enfranchisement for the black majority of South Africa. 

Artists United Against Apartheid was Van Zandt’s brainchild, and followed the pattern of other star-studded affairs by attracting industry heavyweights from across the music spectrum. It also distinguished itself by being tilted ever so slightly towards the edgier end of the pop spectrum by including jazz, rap and punk rockers.

As much as I might be inclined to view Macklemore’s loathsome preachiness as a phenomenon unique to our Age of Multiculturalism and Social Justice, he pales in comparison to the stadium level, globe spanning virtue signalling which occurred throughout the 80’s.  Pop music has always been a vehicle for political protest and social commentary, but the particular brand of “racial justice” grandstanding which is Macklemore’s stock in trade definitely had antecedents in the glossy megaconglomerations of the 1980’s.

Though USA for Africa, Band Aid and Live Aid captured the attention of the masses and drew widespread attention to the plight of starvation in Africa, Artists United Against Apartheid was unique in that it was a protest against the de Klerk regime, an organized boycott of the Sun City resort and a call for economic sanctions against South Africa.  While I can appreciate that the track and the project was animated by a genuine spirit of human goodwill and brotherhood, I think it’s worth taking a look of the song’s allegedly “apolitical” message and the quality of life for post-apartheid South Africans in light of recent current events in South Africa.

On the surface, the political situation in South Africa cried out for change and justice.  The repressions and abuses of the South African National Party and the facts behind the construction of the Sun City resort created a perfect subject for a protest track. State enforced segregation, violent crackdowns, and mass relocations were among the list of human rights abuses perpetrated by the regime.  Add Reagan’s policy of “constructive engagement”, and the standard narrative of the white supremacist conspiracy of capitalist state power writes itself. 

What’s more difficult to appreciate and less frequently discussed is that there was a sharp competition of economic ideas between the nascent ANC and the various militant African nationalist factions vying for political power and the minority National Party.

By his own account, Van Zandt sought the cooperation of militant group, AZAPO; a group which not only espoused socialist political beliefs, but were willing to use violence to achieve their political ambitions.  Van Zandt apparently had to dissuade them from targeting Paul Simon for assassination.

Listen, this is not gonna help anybody if you knock off Paul Simon. Trust me on this, alright? Let’s put that aside for the moment. Give me a year or so, you know, six months.

Van Zandt goes on to recount his disagreement with Simon over Mandela’s own political views. Van Zandt displays a typical leftist bellicosity towards Simon and dismisses his allegation simply because he cited Henry Kissinger as the source of his information.  But neither Kissinger’s or Simon’s claim was without foundations in fact. Mandela may not have been a communist, but he sure sounds like one.  

Today I am attracted by the idea of a classless society, an attraction which springs in part from Marxist reading and, in part, from my admiration of the structure and organization of early African societies in this country.

His association with the South African Communist Party wasn’t exactly a secret either.  While it wasn’t necessarily a carbon copy of the Communist Manifesto, the Freedom Charter was a solidly socialist program and became the guiding document of the ANC.  In his legendary 1964 Rivonia Trial speech, Mandela himself acknowledges as much.

Under the Freedom Charter, nationalization would take place in an economy based on private enterprise.

So what does this have to do with the “Sun City” track itself?

When Rolling Stone ranked “Sun City” as 100th greatest song of the 1980’s, Bono describes the message of the track in the following manner.

This is apolitical. It doesn’t matter what side you’re on — this is common sense.

See? It’s just “common sense.” But the lyrics are pretty explicit about the nature of the injustice in South Africa.

23 million can’t vote
‘Cause they’re black
We’re stabbing our brothers
And sisters in the back

Van Zandt was equally explicit about the call for economic boycott.

I thought in order to change the system, we need to enforce this cultural boycott as a means of getting to the economic boycott, which is really where the action is.

Despite winning the battle of public opinion, witnessing the release and election of Nelson Mandela, Van Zandt affected a phony posture of humility and declined to attend his inauguration and directs blame towards the Reagan administration for their alleged support of the de Klerk regime. 

Social justice warriors, artists and politicians alike agitated for economic sanctions, congratulated themselves for their moral righteousness, and went on to systematically ignore the consequences of these policies on South Africa’s already fragile economy. An economic contraction that would affect tax revenues and purchasing power for a population which depended heavily on redistribution.

One effect of this capital outflow has been a dramatic decline in the international exchange rate of the rand.  This means that imports are increasingly expensive.  It has also helped fuel South Africa’s inflation rate, which at 12-15% per year, is much higher than its major trading partners.

All of which brings us to the present. 

Longtime ANC veteran and current president, Jacob Zuma was charged with raiding the public treasury to fund improvements to his home to the tune of 246 million rand, or about $16.7 million at current exchange rates.

Where is the international condemnation of Zuma from artists?

Van Zandt and countless others agitated for universal suffrage and equal representation in the South African government, but has this made a material difference on the quality of life in South Africa?

By any objective measure, the results are negligible and have perhaps deteriorated further since the demise of apartheid.

Unemployment has remained stuck above 20% for years and certainly hasn’t improved since Mandela and the ANC came to power.  Few black children are raised by both parentsEducational performance is consistently dismalViolent crime persists, and a minority of taxpayers are subsidizing one of the world’s biggest welfare states.  Loose monetary policy has fueled the same speculative bubble in South Africa as it has throughout the developed world.  Politically motivated violence is a common feature of post-apartheid South Africa.

Everyone involved in AUAA was apparently so focused on the attainment of political power, but placed no emphasis on the necessity of economic development.  Even Bono has acknowledged that recently

But their hearts were in the right place, so why get so incensed over a pop track?

Perhaps. I would feel a little bit more charitable towards this effort if it was a one-time phenomenon, but this type of “racial justice” activism was at the very least, an early template for virtually every social justice campaign you can name.

Nowadays, if there anythng done or said that has the slightest perceived hint of a discriminatory attitude, the calls for retribution and censure from the social justice crowd is swift and immediate. With an equal disregard for economic consequences.  All that apparently matters is that egos are satiated by upholding the virtues of Social Justice prescribed by its self-appointed gatekeepers. 

But what about the track itself?

It’s pretty good.  It’s a stylistic hybrid that is a reflection of the people who recorded it; a hip-hop/Afropop flavored rave up with a fist pumping chorus.  It is propelled by its sense of righteous indignation so effectively, you can almost ignore its guilt tripping preachiness.  It doesn’t even get sunk by Lou Reed’s pretentious affectation in his laughable cameo. 

I do not doubt that Steve Van Zandt and the artists who contributed to the AUAA project had the best of intentions.  Unfortunately, we now live in a world where good intentions are often all that’s required with little or no attention given to the political consequences of good intentions. 

The standard narrative that the Reagan administration’s support for the de Klerk regime was animated by racism doesn’t stand up to scrutiny either. Not that anyone on the Left would be that charitable towards a conservative, but anti-communist sentiment was white hot during the 80’s, and even if the fears of communist global expansion were exaggerated, I don’t begrudge Reagan for fearing the rise of another socialist regime in South Africa.  Besides, if that criticism is going to be levelled at Reagan, then it should be made of his predecessors as well.

I also do not begrudge AUAA for making a bold political statement.  In fact, I would prefer to see more artists express their political convictions with such fervor.  Of all the realms of real economic cooperation, music and art is perhaps the one sphere of human activity which allows us to experience and appreciate our shared humanity and sense of purpose.  But if you are going to make a political statement like “Sun City”, don’t turn a blind eye to the consequences of your advocacy. Most of all, make sure you’re applying your criticism consistently and directing a comparable level of indignation towards the black politicians who abused their hard won political power.

The State and Revolution

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I’ve been listening to the rhetoric and propaganda emanating from the Bernie Sanders campaign and the media bootlickers who cover him, and found myself increasingly disturbed by the tenor. It sounded remarkably familiar to the rhetoric from socialism’s tragic past so I took a dive into Vladimir Lenin’s revolutionary tract, State and Revolution, to see how much common ground there is between these two self-aggrandizing, power hungry sociopaths.  To my dismay, I discovered more than a few parallels between Sanders’ pugilistic bluster and Lenin’s.

Tragic similarities notwithstanding, I have to give Lenin credit where credit is due. He doesn’t mince words. State and Revolution is completely blunt about the totalitarian ambitions of Lenin and the Bolsheviks. You can learn a lot about totalitarianism by reading the words of totalitarians. He is remarkably forthright about his communist ambitions and the role of the state in this book. It’s also infinitely more readable than pretentious wanks like Das  Kapital. In this regard, State and Revolution is a useful document by which to compare Sanders’ rhetoric and agenda. Sanders is an elected official seeking the highest office in the land, has a reputation as a truth speaking contrarian and certainly demonstrates an ability to be blunt in his own right.  The book reveals where Sanders’ rhetoric and ambition are similar to Lenin as well as his tendency to indulge in deceptive platitudes in order to shade and distort the nature of state power and the cold truth about his agenda. 

State and Revolution has truth value as a statement of intention, but it is also batshit crazy with delusion and sophistry.  Lenin expounds upon his insane notions about the withering away of the state and the era of classless emancipation that will somehow magically materialize from the proletarian “smashing of the state”. These lunatic ravings mirror the gauzy weasel words and unattainable promises Sanders deploys in his own rhetorical grifts.

Since Marx’ predictions of widespread socialist revolution never came to fruition in the revolutions of 1848 or the failed Paris Commune of 1871, Lenin published this tract in order to bridge the divide between Marx’ unfulfilled predictions and the Bolshevik revolution he’d been actively cultivating. Subsequently, State and Revolution has become the cornerstone of what has become known as Leninist Marxism. 

According to classical Marxist theory and its Hegelian view of historical inevitability, the forces of production would reach a sufficient level of maturity that when the revolutionary proletariat would take their rightful place at the helm of society, the era of classless emancipation would naturally unfold.  However, in 1917, Russia was hardly a developed industrial economy ripe for a proletarian revolution. Not a problem, according to Lenin. What the proletariat need is a revolutionary vanguard to lead a violent revolution and hasten things along a bit. 

In State and Revolution, Lenin opens with what he argues is the correct role of the state and that his thesis is, in fact, grounded in Marxist canon. 

Lenin and by extension, Engels and Marx, are completely correct about the nature of state power. The state is an agency of violence.

Hit it, Vlad:

The  state  is  a  special  organization  of  force:  it  is  an  organization  of  violence  for  the  suppression  of  some class.  What  class  must  the  proletariat  suppress?  Naturally,  only  the  exploiting  class,  i.e.,  the  bourgeoisie. The  working  people  need  the  state  only  to  suppress  the  resistance  of  the  exploiters,  and  only  the  proletariat can  direct  this  suppression,  can  carry  it  out.  For  the  proletariat  is  the  only  class  that  is  consistently revolutionary,  the  only  class  that  can  unite  all  the  working  and  exploited  people  in  the  struggle  against  the bourgeoisie,  in  completely  removing  it.

The problem, of course, is his conflation of state power with capitalist economics.  To Lenin and Marx and many progressives, they are one and the same.  Marxist doctrine posits that capitalism is inherently expropriative, but the apparatus of the state must be controlled in order to “expropriate the expropriators”. The proletarian revolution will only come about by using the suppressive, violent force of the state against the bourgeoisie.  The era of emancipation that follows is a given and a historical inevitability.

Lenin simultaneously reveals the sheer elitist contempt he holds for the oppressed class he professes to represent as well as supremacist delusions he has and ascribes solely to the proletariat class.  After all, they are the only class that is consistently revolutionary.  The proletariat are incapable of emancipating themselves, so they require a revolutionary vanguard to lead the revolution for them. 

The cultish devotion and absolutist mentality of Sanders voters and their apparently unshakable faith in his promises of bread and circuses and retribution against the bourgeois 1% is no different from Lenin.

Compare the messianic self-righteousness and megalomania of their allegedly prole-positive sentiments.  Lenin contends the following:

Only  he  is  a  Marxist  who extends  the  recognition  of  the  class  struggle  to  the  recognition  of  the  dictatorship  of  the  proletariat.

Sanders’ proclamation of the purity of his progressivism:

Lenin argues that the “withering away of the state” will ensue after the proletariat have taken control of and “smashed” the machinery of the state.  This is the exact type of rhetoric that’s deployed by socialist agitators, media sycophants and Sanders himself. 

This  course  of  events  compels the  revolution  “to  concentrate  all  its  forces  of  destruction”  against  the  state  power,  and  to  set  itself  the  aim, not  of  improving  the  state  machine,  but  of  smashing  and  destroying  it.

Compare these sentiments to those expressed by Slate toady, Jim Newell, in describing the aims of Sanders’ “political revolution”:

The Vermont senator doesn’t want to bring Republicans and Democrats together. He means to tear it all down.

Lenin was similarly dismissive of “opportunists” who tried to negotiate with the liberal bourgeoisie of the democratic state.  Sanders attitude towards the billionaire class is equally hostile and describes them as being “on the warpath” in the Newell piece. 

Opportunism  does  not  extend  recognition  of  the  class  struggle  to  the  cardinal  point,  to  the  period  of transition  from  capitalism  to  communism,  of  the  overthrow  and  the  complete  abolition  of  the  bourgeoisie.  In reality,  this  period  inevitably  is  a  period  of  an  unprecedently  violent  class  struggle  in  unprecedentedly  acute forms,  and,  consequently,  during  this  period  the  state  must  inevitably  be  a  state  that  is  democratic  in  a  new way  (for  the  proletariat  and  the  propertyless  in  general)  and  dictatorial  in  a  new  way  (against  the bourgeoisie).

Newell elaborates further on Sanders’ goals:

He campaigns on a promise to turn the whole thing upside down, to create a grassroots “political revolution” that will give him the mandate to bring working- and middle-class people together to overwhelm the “billionaire class” into submission.

Lenin’s ambitions sound pretty similar:

It  is  still  necessary  to  suppress  the  bourgeoisie  and  crush  their  resistance.  This  was  particularly  necessary  for the  Commune;  and  one  of  the  reasons  for  its  defeat  was  that  it  did  not  do  this  with  sufficient  determination. The  organ  of  suppression,  however,  is  here  the  majority  of  the  population,  and  not  a  minority,  as  was always  the  case  under  slavery,  serfdom,  and  wage  slavery.  And  since  the  majority  of  people  itself suppresses  its  oppressors,  a  ‘special  force’  for  suppression  is  no  longer  necessary!  In  this  sense,  the  state begins  to  wither  away.  Instead  of  the  special  institutions  of  a  privileged  minority  (privileged  officialdom the  chiefs  of  the  standing  army),  the  majority  itself  can  directly  fulfil  all  these  functions,  and  the  more  the functions  of  state  power  are  performed  by  the  people  as  a  whole,  the  less  need  there  is  for  the  existence  of this  power.

Sanders routinely inveighs against the corrupt political system which favors the billionaire class over the poor and middle-class.  Lenin engaged in an identical form of demagoguery. 

But  from  this  capitalist  democracy that  is  inevitably  narrow  and  stealthily  pushes  aside  the  poor,  and  is therefore  hypocritical  and  false  through  and  throughforward  development  does  not  proceed  simply, directly  and  smoothly,  towards  “greater  and  greater  democracy”,  as  the  liberal  professors  and  petty bourgeois  opportunists  would  have  us  believe.  No,  forward  development,  i.e.,  development  towards communism,  proceeds  through  the  dictatorship  of  the  proletariat,  and  cannot  do  otherwise,  for  the  resistance of  the  capitalist  exploiters  cannot  be  broken  by  anyone  else  or  in  any  other  way. And  the  dictatorship  of  the  proletariat,  i.e.,  the  organization  of  the  vanguard  of  the  oppress.

One of the more striking resemblances between the rhetoric of Sanders and Lenin is their mutual obsession with forcibly imposing a theoretically equalized bureaucratic order modeled after the postal service. 

Lenin proposes the following:

To  organize  the  whole  economy  on  the  lines  of  the  postal  service  so  that  the  technicians,  foremen  and accountants,  as  well  as  all  officials,  shall  receive  salaries  no  higher  than  “a  workman’s  wage”,  all  under  the control  and  leadership  of  the  armed  proletariat that  is  our  immediate  aim.  This  is  what  will  bring  about  the abolition  of  parliamentarism  and  the  preservation  of  representative  institutions.  This  is  what  will  rid  the laboring  classes  of  the  bourgeoisie’s  prostitution  of  these  institutions.

Contrast these proposals with those proffered by Comrade Sanders:

We need to stop payday lenders from ripping off millions of Americans. Post offices exist in almost every community in our country. One important way to provide decent banking opportunities for low income communities is to allow the U.S. postal Service to engage in basic banking services, and that’s what I will fight for.

How do they differ?  I’m not convinced they do.

Sanders makes a very big deal out of the inclusion of the word “democratic” when he speaks of “democratic socialism”, but Lenin is much more forthright about the nature of democracy.

No,  democracy  is  not  identical  with  the  subordination  of  the  minority  to  the  majority.  Democracy  is  a  state which  recognizes  the  subordination  of  the  minority  to  the  majority,  i.e.,  an  organization  for  the  systematic use  of  force  by  one  class  against  another,  by  one  section  of  the  population  against  another.

Sanders has been garnering enthusiasm for his calls for “political revolution”, but this excerpt of Engels referenced by Lenin sheds a brighter light on what that means. 

Have  these  gentlemen  ever  seen  a  revolution?  A  revolution  is  certainly  the  most  authoritarian thing  there  is;  it  is  an  act  whereby  one  part  of  the  population  imposes  its  will  upon  the  other part  by  means  of  rifles,  bayonets  and  cannon,  all  of  which  are  highly  authoritarian  means.  And the  victorious  party  must  maintain  its  rule  by  means  of  the  terror  which  its  arms  inspire  in  the reactionaries.

Fundamentally, Bernie Sanders is promoting an agenda which has few differences from Lenin.  The rhetoric is softer and the platitudes are attuned to American sensibilities, but the agenda is forcible confiscation, redistribution, unlimited monetary expansion, arbitrary equalization and bureaucratization of economic life.  

Karl Marx was recently cited as the most assigned “economist” in colleges.  After decades of leftist policy including central banking, regulation, price and wage controls, progressive taxation, public education and the entire welfare state apparatus, the ascendancy of Bernie Sanders’ campaign is a sad consequence of the indoctrination of statist economic orthodoxy and the phony pretense of Marxism’s Fight the Power pugilism. Marxist doctrine offers several  convenient advantages for the power hungry politician. Not only does it provide a ready made analytical lens with which to diagnose society’s ills and lay blame at the feet of an omnipresent capitalist boogeyman, it’s an agenda of greed, vengeance and spite painted over with a fig leaf of moral righteousness.

Ironically, when you strip away the delusions of the “withering away of the state”, Lenin had some keen observations about the democratic republic.

To  decide  once  every  few  years  which  members  of  the  ruling  class  is  to  repress  and  crush  the  people through  parliament. This  is  the  real  essence  of  bourgeois  parliamentarism,  not  only  in  parliamentary constitutional  monarchies,  but  also  in  the  most  democratic  republics.

Based on the policy initiatives being championed by Sanders, we can predict what will come to pass if he were to be elected and his policies enacted.  Somehow, socialism manages to escape all criticism and its current champions are always able to promote the idea that It’s Going to Be Different When We Do It.

Sadly, Sanders is also driven by the same repressive desire to centralize, command and dictate from on high that drove Lenin, but Lenin was far more blunt about his ultimate goals of “Equality.”

The  whole  of  society  will  have  become  a  single  office  and  a  single  factory,  with  equality  of  labor  and  pay.

If only Sanders could be that honest.

Civil Rights: Rhetoric or Reality?

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If you take up the cause of criticizing the validity of the state, you soon discover that there are certain criticisms that are strictly verboten.  Public education, roads, PBS, NPR, the National Parks, the EPA, NASA, the NIH and libraries among others are all pretty much sacrosanct. Any criticism of these institutions or initiatives will generally draw opprobrium and general accusations of being an enemy of human decency and a retrograde neanderthal. 

Of all the sacred cows, the biggest of all is perhaps civil rights. Bring up civil rights, Brown v. Board of Education, the ’64 Civil Rights Act, Martin Luther King Jr. and you’re likely to hear swooning praise from all political persuasions that these pieces of legislation, court decisions, leaders and the movements which agitated for them were brave, principled, and an unequivocal American success. Legislative successes which helped set America on a path towards rectifying a sordid past filled with race based oppression and state enforced segregation and subjugation.

But do these legislative achievements translate into real world achievement for the communities for whom civil rights legislation is intended? 

Do statistical disparities in outcomes or representation automatically indicate the presence of prejudicial attitudes?

Even if prejudicial attitudes are present, does it automatically follow that the target of discrimination is damaged for life and his economic prospects are forever compromised?

Is there a positive correlation between legislation and economic achievement?

Is the legacy of civil rights legislation rhetoric or reality?

In Civil Rights: Rhetoric or Reality, Dr. Thomas Sowell addresses these questions and unpacks some the underlying motivations and assumptions behind the civil rights movement. It is generally regarded as axiomatic that disparities in outcome or representation are the result of discriminatory views and that these views will diminish economic prospects for the target of the discrimination.  Sowell treats this as a hypothesis to be tested and held to scrutiny instead of an unchallenged article of faith.  These assumptions are tested on the outcomes for the special cases of both blacks and women. The results of his findings do not fit the social justice narrative and often run completely contrary to it. 

Dr. Sowell draws an essential distinction at the outset.  Civil rights initially meant equality of opportunity. Not equality of results. Since Brown v. Board of Education and the ’64 Civil Rights Act, the meaning of “civil rights” has swung unequivocally towards a focus on outcomes accompanied by an ever expanding activism from the state and its various proxies in academia. 

Obviously, this book provides a very clear window of insight into the contemporary social justice movement and its pathological fixation on equal representation and outcomes  Dr. Sowell argues that a key factor in this ideological sea change can be traced to two key edicts: LBJ’s Executive Order 11246 and Green v. County School Board of New Kent County. These two orders shifted the civil rights focus away from equality of liberty and towards equality of outcome. I personally contend that the entire contemporary social justice movement has origins in these orders.

The role of family life, parenting, technological innovation and cultural trends are rarely, if ever, acknowledged by civil rights activists with respect to economic advancement for blacks or any other seemingly disenfranchised minority. Social justice advocates are all too willing to consider the passage of a law, the election of a politician or the installation of a bureaucrat as the sole determining factor in maximizing economic achievement. Sowell deploys a trove of statistics to show how high economic achievement is closely correlated with a stable home life while unfavorable and tragic outcomes are equally correlated with instability and single parent homes.  The latter being especially true for blacks

Sowell also examines how a number of policies which align with the civil rights vision such as licensure requirements, regulation, subsidies, food stamps and minimum wage all conspire to aggrandize politicians and undermine black achievement. 

This book was published in 1984, and even back then, feminists were flogging the myth of the wage gap.  The numbers were a little different, but the myth of rampant sexism on which the talking point stands remains unchanged.  Sowell devotes a chapter to this fairy tale and destroys it handily and effortlessly.  Though feminists like equate themselves with minorities, the effect that motherhood and marriage plays in economic outcomes simply cannot be overstated.  Despite regularly working fewer hours, choosing career paths which make few physical demands, require less skill and offer more flexibility, the passage of the Equal Pay Act of 1963 as well as a steadily rising labor force participation rate since 1948, feminists insist on rehashing the fiction of an oppressive, sexist patriarchy that’s holding them back. The stubborn persistence of the myth despite the refutations of Sowell and numerous academics up to this day is a sad testimony to the power of demagoguery and repetition.

Civil rights activists have successfully agitated for universal suffrage, but Sowell argues that the pursuit of equal economic outcomes by way of the ballot box or bureaucratic fiat is wrongheaded and doomed to fail. If there’s a threat of government punishment hanging over the heads of an employer in order to fulfill some arbitrary diversity quota, the hiring incentives become completely perverted. Employers will either screen out unskilled labor more aggressively or hire an employee who meets the diversity criteria, but is otherwise poorly qualified. 

Frederic Bastiat correctly concluded that slavery was one of the moral blights that plagued the American experiment, and America has been trying to atone for the oppression of African-Americans since the passage of the 13th Amendment.  Despite being one of the first major countries in the history of human civilization to end slavery, all of this self-flagellation has culminated in a contemporary social justice movement that’s more toxic and divisive than ever.

Like the original women’s suffrage movement and the efforts of early Second Wave feminism, the intentions of the Civil Rights movement activists were noble and laudable.  Sadly, the contemporary social justice movement has mutated into an embittered and vengeful mob which prioritizes groupthink, automatically assumes the presence of prejudicial attitudes as the cause of poor achievement, and places a pathological emphasis on preferential treatment on the basis of race and gender to the exclusion of personal achievement, skill, character and merit.  

Just as Christina Hoff Sommers recognized and challenged a rising tide of irrationality within feminism, Thomas Sowell saw a comparable level of victimology brewing within civil rights activism and sought to lance the boil of opportunism and demagoguery growing on the face of American politics and academics.  This festering pustule of ideological rigidity has only grown since this book’s publication in 1984, but the cold facts he lays out stand tall like an immovable pillar of stone amidst the fickle winds of political hackery and academic quackery.  Social justice warriors, academic ideologues, and political charlatans need and deserve rebuke for fomenting division, disseminating disinformation and misinformation, and insisting on treating people differently because of biological traits which cannot be changed.  This book is the sober rebuttal to their pathetic bleatings.

Great Myths of the Great Depression

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I remember very little from the US history courses I took during my time in public schools. It felt like a relentless flogging of names and dates. I remember covering the major stuff. The Revolutionary War, the Constitutional Convention, the Civil War, the World Wars, and of course, the Great Depression were presented as a mind numbing barrage of details to be dutifully regurgitated in an exam. Beyond my impression that the Smoot-Hawley Tariff was a funny sounding name for a piece of legislation, the most I remember about the Great Depression was that capitalism failed and the government under FDR’s leadership saved the day.  Based on the sentiments expressed by progressives to this day, this impression seems widely shared. 

However, this romantic view doesn’t square with reality.  A great deal of clear eyed research has been conducted to expose the factual record, and Great Myths of the Great Depression is a fantastic primer on the true legacy of the Hoover and Roosevelt administrations. 

Written by Foundation for Economic Education president, Lawrence Reed, the piece is filled with interesting facts and summarizes the best of this research very effectively. Perhaps the most interesting revelation is how the Hoover administration’s economic activism paved the way for of the FDR administration’s highly interventionist policies of the New Deal. Contrary to popular mythology, Hoover was not the hands off, laissez-faire Republican many claim. 

Starting with a highly inflationary monetary policy spurred by the Fed which fueled the 20’s stock market bubble, the Fordney-McCumber Tariff of 1922 followed by the infamous Smoot-Hawley Tariff of 1930 triggered deep contractions in agriculture and sparked an international trade war. In the wake of a global collapse in commodity and asset prices precipitated by the ’29 market crash, the Fed took a bad situation and made it worse by raising the Fed funds rate and throttling the money supply into a deflationary spiral.  Hoover only compounded the problems by increasing subsidies to businesses and farmers which were doled out through the Reconstruction Finance Corporation and the Federal Farm Board respectively. Just as modern politicians and would-be intellectuals believe that high wage mandates lead to increased purchasing power and higher consumer spending, Hoover’s Department of Commerce bullied businesses into keeping wages high.  This allegedly laissez-faire president threw another wrench into an already sputtering economic engine by passing the Revenue Act of 1932.  Hardly the legacy of a president friendly to free markets. 

Despite charging the Hoover administration of leading the country to socialism, promises of restoring fiscal rectitude and shoring up the gold standard, FDR escalated every one of Hoover’s policies in ways that prolonged and protracted the misery of the Depression. 

Paving the way for the eventual destruction of sound money, one of FDR’s first major acts as president was to criminalize the ownership of gold through the signing of Executive Order 6102.  When you’ve got a hard money supply and you’ve got designs on an expanded warfare-welfare state, the Fed can inflate the money supply a little more easily if the proles don’t own too much gold. 

FDR’s first big legislative move which had the unfortunate effect of turning business into quasi-fascistic wards of the state was the National Industrial Recovery Act of 1933.  Instead of responding to the natural forces of supply and demand, businesses were forced to comply with a raft of arbitrary mandates imposed from on high. 

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One of the particularly horrific and wasteful mandates of the New Deal was the Agricultural Adjustment Act of 1933; a legislative abomination that seemed more befitting of Stalin than an American president.  Crops were burned, livestock were slaughtered and taxes were levied all in service of eliminating surpluses and increasing the purchasing power of agriculture producers. Despite being initially stricken down as unconstitutional in 1936, the AAA’s destructive consequences weren’t limited to kneecapping the agriculture industry. The seed of the eventual destruction of the gold standard known as the Thomas Amendment was written into the AAA which paved the way for unlimited credit expansion by the Fed.  FDR would eventually revive the AAA in 1938 and institute a vast array of agriculture price supports, quotas and subsidies through Federal Crop Insurance Corporation and Commodity Credit Corporation and enshrine an era of farm belt crony capitalism and big agribusiness. 

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By 1935, FDR implemented the Works Progress Administration; the bureaucracy which doled out millions to fund domestic infrastructure projects and left a seemingly indelible impression of the virtues of federal economic activism in the minds of the public. Though many roads were paved and bridges built, a closer examination of the WPA legacy reveals more than a few arbitrary mandates, squandered resources and crony coffers lined. 

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Things went from bad to worse with the passage of the quasi-Marxist National Labor Relations Act of 1935 aka the Wagner Act.  The Wagner Act took labor grievances out of the courts and into the purview of a new federal bureaucracy, the National Labor Relations Board. Under the cover of legitimacy accorded by the Wagner Act and NRLB, labor unions could threaten and intimidate employers and nonunion workers into compliance and acquiescence.

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As if these actions weren’t damning enough, the origins of the 2008 housing crisis can also be traced to Federal Housing Act of 1934.  The vast complex of government sponsored entities and federal agencies charged with overseeing home ownership mandates created a set of incentives which in conjunction with an inflationary monetary policy provided more than enough legislative and monetary helium for a housing bubble. 

The conventional wisdom about the government’s role in alleviating the Great Depression and the private sector’s role in creating it is badly perverted.  Sadly, politicians benefit by peddling promises of prosperity that they can never fulfill.  Each dollar diverted towards a subsidy is a dollar of wealth destroyed which could have been diverted towards private enterprise. Each dollar of subsidy dispensed by a bureaucrat enriches a crony, aggrandizes the bureaucracy and diminishes the sphere of voluntary exchange.  Each minimum wage increase is an increase in production costs and prices low skill labor out of the market.  Each federal agency charged with upholding abstract notions of “public good” creates a license for corruption and moral hazard which only diminishes people’s faith in private enterprise. 

As politicians agitate anew for yet more intervention into an economy to “fix” problems that were legislated into existence with the laws they wrote, the history and legacy of the Great Depression deserves a deeper reexamination.  Mr. Reed’s essay is an essential starting point. 

Economic Calculation in the Socialist Commonwealth

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Despite its track record of failure, oppression and misery, socialism has enjoyed a seemingly endless parade of apologists and defenders.  As improbable as it seems, the argument for state socialism was hotly debated in the 20th century. This inexplicable allure is surpassed only by the seemingly deathless allure it holds to this day.  While there are many academics who are eager to put a new coat of paint on socialism’s rotten edifice, it seems that too few pay attention to the individuals who challenged socialism and were proven correct. This is likely due to the fact that this is exactly what academic elites and apparatchiks want, but socialists and free market advocates alike are encouraged to read what many regard the definitive demolition of the argument for the socialist state, Ludwig Von Mises’ 1920 essay, Economic Calculation in the Socialist Commonwealth. It is important not only because it identified the failures that of the socialist state with devastating accuracy, but because it is a purely economic critique of socialist economics.

Mises’ argument is built on three central theses:

  1.  A socialist state with a monopoly on production goods is effectively destroying the natural market price system and rendering rational economic calculation impossible
  2. A socialist state which prioritizes labor based valuations on consumer and production goods is ignoring individual subjective preferences
  3. The socialist state destroys personal responsibility and initiative by removing the incentive to economize

Mises draws an important distinction around production goods and consumer goods at the outset.  He rightly observes that consumer goods, the final result of production which a consumer can use to fulfill a desired end, are valued in monetary terms.  Consumers can subsequently engage in trade using monetary exchanges amongst themselves in order to fulfill their subjective preferences.  The entrepreneur, on the other hand, is not afforded the same opportunity.  In order to prioritize production goods and engage in the act of economizing, the entrepreneur needs to perform economic calculation through a free floating price system which emerges through exchange in a system of private property.  Because the socialist state monopolizes production goods and dispenses them through an arbitrary and bureaucratic allocation process that’s devoid of rational pricing, the entrepreneur is hamstrung. An efficient division of labor cannot even take place.  No single human mind or collection of human minds can replace the social nature of the price system in a competitive free market.

Because Marxism, the philosophical font of virtually all socialist economics, posits a dumb and fallacious theory of exploitation between the entrepreneur and the laborer, those who subscribe to socialist doctrine attribute an inherently predatory quality to exchange relations in the production process. The entrepreneur is somehow extorting and expropriating from each laborer and depriving him of the surplus value that results in the final exchange of consumer goods. Socialists have wrongly assigned virtue to the state monopoly on production goods, and subsequently, end up destroying the uniquely human capacity for rational calculation. Once socialists have gained control of the apparatus of the state, there is no underlying set of principles by which the socialist state can proceed that is even remotely comparable to the price system of the free market.

When Marxism solemnly forbids its adherents to concern themselves with economic problems beyond the expropriation of the expropriators, it adopts no new principle, since the Utopians throughout their descriptions have also neglected all economic considerations, and concentrated attention solely upon painting lurid pictures of existing conditions and glowing pictures of that golden age which is the natural consequence of the New Dispensation.

Marxism also posits a juvenile theory of alienation inherent in capitalism, but attribute the malady to the wrong source. Socialists bemoan the allegedly dehumanizing qualities of free market exchange while conveniently ignoring the fact that state intervention exists everywhere. Modern neoclassical macroeconomics reinforce and perpetuate an unchallenged activist role for the state in economic affairs as well as the reduction of economic life to increasingly abstract mathematical models.  As Dr. Joseph Salerno astutely argues in the essay’s postscript, it is exactly the reverse.

Abolish all, or even one, of these institutions and human society disintegrates amid a congeries of isolated household economies and predatory tribes. But not only does abolition of private ownership of the means of production by a world embracing socialist state render human social existence impossible: Mises’s analysis also implies that socialism destroys the praxeological significance of time and nullifies humanity’s uniquely teleological contribution to the universe.

Dr. Salerno goes further to argue that despite Mises argument against full scale state socialism, the argument retains its relevance to contemporary state interventions in healthcare and energy production.  Whether they be tax breaks, subsidies or loan guarantees, the myriad interventions and subventions in the managed market economy distort production incentives, encourage misallocation of resources, and institutionalize mediocrity and failure by keeping entrepreneurs insulated from the forces of supply and demand.

Mises predicted the failure of socialism with devastating accuracy years before the collapse of the Soviet Union. While China’s version of market socialism is undoubtedly an improvement over Mao’s regime, their economic and monetary policies have lead to massive instability and mismanagement of resources which lend further credence to Mises core argument.

Almost a full century has passed since the initial publication of this essay.  Despite socialism’s continued failures here and abroad, the champions of socialism continue to flog the rhetoric of a discredited ideology while remaining seemingly oblivious to the intellectual and moral void at the core of their pursuit.  The leading lights of socialist thought have not offered any meaningful rebuttal to this problem since perhaps Oskar Lange, but as Mises already correctly argued, mathematical models cannot replicate human action.

Socialism offers nothing but a license for the unlimited expansion of state power packaged as a litany of grievances dressed up in a pretense of intellectual profundity and moral rectitude.  The promise of “equality” is never achieved, but socialists peddle these pathetic fantasies with the same chicanery and mendacity as a televangelist. Mises offered a theoretical framework and a set of economic principles that were grounded in sound scientific reasoning and a respect for individual liberty.  His arguments deserve a proper reckoning.
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The Law

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I graduated from public high school and obtained a bachelor’s degree from a music school with some basic liberal arts requirements, and up until recently, I was never introduced to Frederic Bastiat’s work. I’m disappointed by this fact, but after reading it, not surprised. 

Frederic Bastiat’s masterpiece, The Law, should be read by everyone who values the freedom of the individual or a free society.  For those unfamiliar with Mr. Bastiat, he was a French businessman, political philosopher, and statesman and could be described as the Ron Paul of 19th century France. This book was published before he died and many justifiably regard it as his definitive masterpiece of political thought. The Law was intended as a response to the ascendant socialist policies and politicians. 

The Law is the megaton warhead of truth bombs. There isn’t so much as a wasted word. Every sentence bursts off the page and cuts through the fog of sophists, academics, socialists and would-be intellectuals with the precision of a Hanzo sword. 

The Law is a powerful argument that exemplifies the tradition of European classical liberal thought from which the American founding fathers drew inspiration and shaped the principles on which the modern libertarian movement is based. 

Bastiat argues that there is a supreme, natural law to which all written law must be subordinate, and that this ur-law has been perverted to serve its opposite purpose: legalized plunder. The right to “individuality, liberty and property” is the proper conception of the law and that the very existence of the state is merely the collective assignment of self-defense to a public institution.  Bastiat argues that as long as the state circumscribes itself to this function, individuals will not assign undue allegiance to the state nor petition for its expansion. It’s a compelling argument, but since socialism was ascendant when it was written, Bastiat attends to the logical consequences of empowering the state to engage in legalized plunder, the defining feature of socialist politics, in the remainder of the text. 

This book is one hundred sixty-six years old, and yet, everything in it would easily be shouted down as heretical and retrograde today by apologists for the state.  The truth of what he’s arguing cannot be denied. 

Bastiat righteously eviscerates the sheer elitism and contempt socialists have towards humanity by attempting to link moral choices and civic virtue to lawful coercive force. By supplanting the free choices of individuals with the forcible imposition of the will of the legislator and the bureaucrat, the socialist systematizes sociopathy, avarice and obedience.  All of the dysfunction Bastiat described in 1850 applies to the sad state of current affairs.

All of his observations of socialists are devastatingly accurate.  Socialists do not care for facts or reason and let neither get in the way of the forcible implementation of their agenda.  Socialists view humanity as empty vessels that need their divine guidance and their pretensions intellectual superiority. 

In the latter half of the book, Bastiat takes direct aim at the would-be ministrations of the philosophers, politicians and didacts of the day.  From Robespierre to Rousseau, Bastiat takes apart these insufferable authoritarians and their detestable designs on managing human affairs down to the last detail.  As a result of the perversion of the law to which this book is devoted, America and the West have colonized academia and created vast cottage industries dedicated to the various sects of state worship and their doctrines of obedience. The will to dominate others has polluted the minds and perverted the ambitions of people since the time of Plato, and Bastiat’s rebuke remains sadly relevant. Bastiat says it best:

If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind?

Bastiat identifies the proper application of law as defensive force.  Every individual has an inviolable right to defend life and property. This is the sole function of the state confined to its proper role. In America presently, the respect for this basic, natural right is consistently undermined by the deranged and manipulative bleating of politicians, activists, and media alike in their ceaseless quest to consolidate power.  For some, mere ownership of firearms makes your motives suspect and armed protest will get you branded a terrorist by the bloodthirsty mob. 

One of the most provocative arguments is Bastiat’s skepticism towards universal suffrage.  Nowadays, all you hear from academic, media, identity politics and feminist circles is a relentless drumbeat of scorn and reproach heaped on the “white male capitalist patriarchy” and a seemingly ceaseless campaign to browbeat men everywhere into a posture of penitence for daring to exclude anyone from the ballot box despite having no role in crafting the founding documents.  It’s very easy and tempting to view Bastiat’s argument as the retrograde view of a man who wants everyone else to be subordinate, but this reasoning emerged from a philosophical conviction that political power was not meant to be coveted or actively pursued in service of anything beyond preservation of liberty in the first place. He contends that if the law were confined to its proper function, everyone’s interest would be the same. Films like Selma and Suffragette seem explicitly calculated to inculcate feelings of guilt and shame in men (white men specifically) for committing the unspeakable crime of disenfranchising women and minorities from voting. It’s more than a little ironic that feminists don’t want male politicians making decisions by legislative fiat over their reproductive choices, but are simultaneously completely content to advocate for expropriating resources for material benefits and special legal privileges by the same method.

Speaking of Suffragette, it’s also ironic that movie with such a pro-suffrage message seems to have borrowed from Mr. Bastiat. Bastiat wrote, “The safest way to make laws respected is to make them respectable”.  In the film, Violet Miller says, “You want me to respect the law? Then make the law respectable”.  Where was Inigo Montoya when we needed him?

Despite the attainment of universal suffrage, this achievement is apparently no longer sufficient either.  Between open appeals from our enlightened progressive overlords for mandatory voting and completely sincere appeals for children voting, the appetite for government sponsored avarice and unchallenged fealty to the state knows no boundaries.

Another important point Bastiat makes is that one cannot formulate political theory without first developing a rational, scientific theory of economics. Modern economic thought takes government intervention as a given. Bastiat died before the Marginal Revolution, but it’s apparent that his conception of economics assigned greater importance to human action and seemed closer to the theoretical framework of praxeology that was eventually articulated by Mises.  

As compelling as the idea of a limited state is, it seems fairly apparent that this idea has proven itself a failure. The law has been perverted to serve its opposite purpose, and many now take it as a given that the law must serve socialist agendas. Generally speaking, arguments to the contrary are immediately regarded with scorn, ridicule and censure. After years of inflammatory anti-capitalist rhetoric from the political, academic and media complex, we are living in a time when a self-identifying socialist is running for president. Imagine Mr. Bastiat’s disappointment in the current state of affairs were he alive to bear witness.

Despite the rhetoric of Constitutional conservatives and minarchists, they have no track record of success in scaling back the state.  During the Obama administration alone, the funding for the Department of Homeland Security dried up and the charter of the Ex-Im Bank was allowed to expire.  Both were revived and conservatives played a role in their restoration. And when conservative candidates for president openly champion minimum wage indexed to inflation, it’s fair to say that modern American conservatism has drifted far away from its original principles.

Forget the pretentious Marxists, socialists and the so-called anarcho-communists and their attempts to resuscitate dead ideas and pass them off as transgressive thought.  These people dominate academia and have plenty of sympathy in the media, political and intellectual classes and they continue to present themselves as beleaguered underdogs whose voices are being choked under the oppressive stranglehold of capitalism. What utter horseshit. 

Those who’ve borne the torch of liberty have always had to fight the socialists, centralizers, planners, and academic elitists who think they know what’s best for you. Sadly, the false promise of socialism retains its appeal in the 21st century. Fortunately, the message of The Law remains undimmed by the passage of time and more urgent than ever. 

The Big Short: Film Review

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Despite its own blatant obsession with profits and artifice disguised as substance, Hollywood has been deeply unkind to Wall Street in its films. It’s unsurprising given the fact that liberals have colonized Hollywood and an overwhelming majority of films and television shows have varying quantities of leftist editorial.  You’d assume they’d be nicer given that plenty of Wall Street hedge fund money flows into Hollywood. Perhaps the tone of reproach and recrimination that forms the backdrop of The Big Short can be attributed to Wall Street’s increasing reticence to fund Hollywood ventures. Regardless, The Big Short is filled to the brim with contempt for banking and partisan agitprop.

I went into the cinematic adaptation of The Big Short expecting it to have the same editorial flaws as the book and these expectations were confirmed. Unfortunately, the film exceeds the dishonesty of the book and makes additional errors which alternate between rehashing thinly veiled leftist talking points and acts of blatant deception. And the book is plenty dishonest all by itself.

Why grouse about it?  Because the film, like the book, wants to have its cake and eat it too. It wants to be big Hollywood entertainment while simultaneously convincing you that it’s being honest with you and giving a definitive, fact-based account of the housing crisis. It’s a movie that wants you to believe that it is a Smart, Hollywood Movie made by Smart, Educated People Who Get It and it’s exposing that stuff you always assumed was a bunch of shit, but it’s really here to confirm your bias! See? The New York Times and the Wall Street Journal agree, too!

The film deploys a number of techniques to insinuate its truthfulness. Just like House of Cards, The Big Short makes generous usage of the dramatic aside. The actors deliver little monologues directly to the audience which refer to the actual historical events to let you know that you’re being admitted into a circle of confidence and being given the straight dope.

In the book, Michael Lewis offers little explanatory passages throughout the book to help the reader understand the actual instruments and transactions being discussed. In the film, they use celebrity cameos and snarky text blocks. They’re lifting the veil of secrecy and demystifying all that Wall Street technobabble! Margot Robbie explains CDO tranches while luxuriating in a bubble bath! Anthony Bourdain makes an analogy between CDO’s and fish stew made with aged ingredients!  Selena Gomez breaks down synthetic CDO’s while playing blackjack! How droll!

Bear in mind that the film isn’t without entertainment value. Director Adam McKay has a track record in comedy and he wisely sought to emphasize the book’s bleak humor. As a piece of entertainment, The Big Short is a Wall Street movie that at least has a little fun with an admittedly gloomy topic.  I just wish it was as substantive, informative and morally righteous as its cheerleaders claim. 

The film’s partisan bias surfaces right away.  In a voiceover delivered by Jared Vennett (Deutsche Bank trader Gregg Lippman IRL), Ryan Gosling takes us back to the heady days of Salomon Brothers in the late 70’s and early 80’s where the mortgage-backed security had its humble origins.  We’re introduced to Lewis Ranieri, the presumed father of the MBS as recounted by Michael Lewis in Liar’s Poker.  Before mortgage securitization, Vennett says, banking was a boring profession. It was inhabited by losers. It was devoid of this absurd speculation with Byzantine instruments and impenetrable jargon.  It was boring. You got that, proles? Banking used to be boring.  Let’s make banking boring again, Comrades!  If only there was a politician with those aspirations.

The film also shamelessly deploys some blatantly partisan semantic dogwhistles. In Vennett’s initial pitch to FrontPoint Partners (the hedge fund run by Mark Baum who was played by Steve Carrell), he uses a jenga tower to explain the CDO. In his explanation, he says old fashioned mortgage-backed securities were backed by the government and were safe. But then along comes private market subprime bond securitization which introduces all these risky instruments into the system! Got that, proles? Government = safe and boring. Private market = unregulated, risky, unbridled, rapacious greed

If only it was actually true.  Let’s take a look at what Cameron Cowan of the American Securitization Forum had to say to the House of Representatives Subcommittee about the role of legislation and GSE’s on the expansion of the subprime mortgage securitization market back in 2003:

As part of the Tax Reform Act of 1986, Congress created the Real Estate Mortgage Investment Conduit (REMIC) to facilitate the issuance of CMOs. Today almost all CMOs are issued in the form of REMICs. In addition to varying maturities, REMICs can be issued with different risk characteristics. REMIC investors—in exchange for a higher coupon payment—can choose to take on greater credit risk. Along with a simplified tax treatment, these changes made the REMIC structure an indispensable feature of the MBS market. Fannie Mae and Freddie Mac are the largest issuers of this security.

Add to this home ownership mandates from HUD, the FHA and pieces of legislation like the Community Reinvestment Act, and you’ve got a pretty clear set of government mandates and incentives which provided more than enough fuel for a housing bubble.

The film is playing a very simple game of misdirection. Just because subprime mortgage bonds were underwritten by private institutions does not mean that private institutions created the conditions for the housing bubble.  Both the film and the book make no effort to distinguish between mortgage loan origination and securitization and the moral hazard that accompanies this separation. 

Just like the book, the film turns a completely blind eye to the role that monetary policy played in inflating the bubble. In a particularly revealing scene, a Goldman Sachs employee informs the “garage band hedge fund”, Cornwall Capital that they can buy credit default swaps because “If you give us free money, we’ll take it.” 

Of course, the filmmakers wanted to portray the dirty, evil greedy bankers as unscrupulous thieves.  But if you just reorient that statement and apply it to the relationship between the Federal Reserve and the banks, it’s actually remarkably accurate.  The Fed dispenses “free” money, and the banks take it

The film’s biggest partisan offense is McKay’s decision to swap Cornwall’s visit to the SEC with a visit to the Wall Street Journal. Cornwall wanted to expose the imminent housing collapse and they made their initial pitch to the press. In the film, their pleas are met with indifference by a Wall Street Journal reporter who’s so deep in the tank with the bigwigs, he can’t jeopardize his position to do the right thing.  Of course! Those bootlickers at the Journal aren’t going to have any courage. They’re toadies for the bankers! They were completely oblivious to the possibility of a housing bubble!

In the book [1] however, the WSJ connected them directly with the enforcement division of the SEC. And guess what?  Their case was treated with total indifference. 

They tried to make up for it in a scene involving a female college friend recently departed from the SEC.  In a poolside conversation at an extravagant industry conference in Las Vegas, the former SEC employee is basking in the sun in a sexy bathing suit listening to the impassioned pleas of Jamie Shipley and Charlie Geller. She confides that the SEC wasn’t pursuing enforcement actions because the funding dried up. 

Come on, guys. This is a bald-faced lie. Not only did SEC enforcement actions escalate during the Bush administration with nothing to show for it, but SEC agents were busy watching porn when the economy cratered. The SEC are not exactly the indispensable watchdogs that many politicians would lead you to believe.

They even sneaked in a line of incredulity when their friend flirts with a shirtless hunk from Goldman. “You mean there isn’t a law which prohibits you from seeking employment in the private sector?!”

Yes, we get it, McKay. You’re doing your best to include all the requisite talking points.  

Topping off this turd pile of talking points is the parting speech Mark Baum gives as he’s persuaded into selling FrontPoint’s position in credit default swaps just as the economy grinds to a halt. He anguishes over the decision because he knows that the crisis will be blamed on “immigrants and minorities.”  That’s right, you dirty conservative bastards.  Not only do you sanction unscrupulous Wall Street thievery, but you’re xenophobes and racists and you’ve screwed everything up for people who are just trying to get a modest piece of the American Dream.  Now shut up and get in line. 

The book and the film are remarkably unwilling to assign any real criticism towards the government. Both Lewis and the filmmakers seem intent on having you believe that the government played no role in encouraging mortgage securitization, home ownership, leveraged finance or excessive household debt.

In the last scene, Mike Burry as played by Christian Bale is typing up his final letter to his clients after banking $720 million from credit derivatives. In a voiceover, he inveighs against fraud and following authority.  On the surface, it’s a powerful screed, but like the remainder of the film, it’s shallow and slightly misleading.

Surely, we should repudiate fraud in business dealings, but if you aren’t going to discuss government fraud or how it contributes to a culture of fraud, the moral lesson seems unnecessarily selective and intellectually dishonest.  Unquestioned deference to authority is something that each person should challenge, but if your story about the 2008 financial collapse doesn’t question any government authority and heaps all of the blame at the feet of Wall Street, you might just be a partisan hack. 

[1] p. 166, The Big Short