January 30, 2009

Corruption at the top

Let's start here: Giuliani Defends CEO Bonuses

Rudy Giuliani, the world's most popular former mayor, is responding to the outrage being expressed by American taxpayers because banks which spent enormous non-existent funds to float checks and pay out insanely high bonuses to their senior management are now expecting the taxpayers to keep their insolvent businesses afloat. Long sentence, I know. Nonetheless, it covers all the main points.

Next, a pleasant diversion: Sen. Claire McCaskill Sponsors Bill to Cap CEO Salaries

I laughed when I read that one. In private conversations I have argued for years that something has gone deadly wrong when we find ourselves in a situation where the American President is the lowest paid executive in the country. My wife makes more than the American President and she's not even a senior executive! I applaud Sen. McCaskill for her courage and integrity. Even though it would mean a reduction in my own quality of life, I hope her bill passes into law.

The problem with all of these extreme executive salaries is that they are based on imaginary money generated by excessive use of credit. Take the automotive industry for example. The CEOs of the Big Three have comparable salary/bonus packages. Where does that money come from? The vast majority of revenue enjoyed by the Big Three is not the result of sales to you and I. No, in the automotive industry the real money is in fleet sales. Companies, government offices, schools, commercial farms, and transport companies that routinely buy vehicles in lots of hundreds, thousands, and even tens of thousands every single year. How do they pay for those fleets? With credit! Companies borrow money from banks while governments issue bonds. It's all imaginary money made possible by the fractionalized reserve banking system. This is one of reasons the banking system has reached the point of collapse.

Another reason goes straight to bad economic planning. Over the past three decades the Federal government has created a large body of legislation that encourages the movement of industry and agriculture to foreign countries through outsourcing and free trade. As a result, not only is our economy based on imaginary money, but now we no longer produce any real capital at all! Instead, our entire economy is now based the imaginative manipulation of numbers by the richest 10% of our citizens instead of on the productivity and creativity of 90% of our labor force.

Lots of folks will tell you Karl Marx was insane, and he might very well have been, but he did get one thing right: the only true capital is labor and natural resources. Communism failed because the socialist economic model's communal work ethic assumed every individual would work for the sake of work. We don't. The only way we're willing to spend our labor transforming raw materials into marketable products is if the rewards are high enough.

Therein lies the seeds of destruction for capitalism, as well. When work is solely based on a pyramid of rewards, with the highest rewards going to those who exploit the labor of others rather than those who are doing the work, then the real capital of labor is being abused and individuals will not work at peak efficiency. Instead, they form labor unions, chant Marx-inspired slogans, and go on strike.

The simplest solution, and also the least likely to have any real-world impact, is to do what Sen. Caskill is trying to do and enforce limits on those who sit on top of the labor pyramid giving orders and making plans. We do need these exploiters, unfortunately. Most of us will not bother to do anything worthwhile unless someone else comes up with an idea, plans it out in detail, anticipants and allows for impediments, and then finally tells the rest of us what to do. The human animal is by nature quite lazy, sometimes to the point of self-destruction. Sen. Caskill's proposed legislature, if it passes, will destroy the motivation of those who make the plans.

What we really need is a new cultural paradigm. We need a philosopher or economist to come up with a new social organization theory that will keep both the exploiter and the laborer highly motivated, well-rewarded, and busy at what they do best. The difference between the new model and the current one would have to be finding some means to make the system stable and reliable without depending on imaginary capital such as that created by a fractionalized reserve banking system. No small task and not one I am competent to pursue. Nonetheless, if an answer cannot be found, then economic collapse coupled with dramatic infringement on Constitutional rights will lead the United States of America straight into a new civil war. The way things are going now I give us eighteen months, five years at the most.

Infringment on our Constitutional rights is my next point. Those 10% of us who make up the economic elite know the same things I do. Even though they know the current system cannot continue, they have a vested interest in maintaining the status quo, even to the point of total social collapse. A couple paragraphs ago I mentioned, "laziness to the point of self-destruction." Laziness is exactly what has been happening in the United States for the past three decades. Instead of fixing our broken system, the 10% at the top who run our economy (and by extension, the world economy) have been slowly and steadily taking away the tools you and I need to remove them from the political landscape.

Freedom of speech has been curtailed by using social intimidation to prevent journalists from investigating corruption and reporting it. Our First Amendment rights have been further curtailed by creating an elaborate system of permits and fees preventing anyone and everyone from standing on a street corner (or better yet, the middle of the street!) and decrying the corruption they see. YouTube, Facebook, and thousands of other "social networking" sites have begun implementing detailed and wide-ranging "decency" policies to prevent "unruly" participants from posting pornography, profanity, or even worse, dissent.

Other freedoms have been stripped from us as well. The epitome of this loss of freedom is best illustrated here:

Motorist with 16 guns arrested at LAX

Scary headline, isn't it? Sixteen guns at an airport! Surely this fellow must be a terrorist?


His name is Phillip Dominguez. He was stopping at the airport to pick up a friend and then the two of them were headed out to the gun range to do some target shooting. His weapons were carried securely and safely in a legal and effective locked gun box underneath the locked solid cover over his truck bed. Like a good, law-abiding citizen he told the officers what he was carrying, and then undid multiple layers of key and combination locks to show them.

So they arrested him, confiscated his guns and impounded his truck. They had no search warrant, no arrest warrant, nothing at all to hold him on except a truck full of legal guns and ammo. Does anyone out there realize how deeply this man's Constitutional rights have been violated? The Second Amendment allows him to have those guns and carry them. The Fourth Amendment prevents the government from arbitrarily searching his truck and then confiscating his weapons. The Fifth Amendment should prevent the police from demanding to know what he has in the back of his truck, or at the very least, allow him to refuse to answer when they do ask!

The original Associated Press article which I linked to above has been carried by hundreds of news organizations around the world. One news program, Fox 11 in Los Angeles, went so far as to label him a "knucklehead" and spent more time insulting his person than reporting on his arrest. Of the dozens of reports I have read on this incident, not a single article has mentioned how deeply the arresting police arbitrarily and without justification completely violated this man's Constitutional rights! Not even the ACLU! The only people who have come out in fury have been scattered Second Amendment supporters who have blogs:

Sensibly Progressive
Free in Idaho
Crime File News
Calguns Foundation

And that's it! These are the only ones I've found defending Dominguez' Constitutional rights. All of the other posts, commentaries, forum discussions, and so on, that I have been able to dig up have called this arrest justified and legal.

I don't understand. He's just a guy headed out to the range to do some shooting with a buddy. He never left his truck and never planned to leave his truck. All of the weapons were carefully and safely locked away. Sixteen guns might seem like a lot to some people, but I can remember many times when my family went to a gun range carrying two or three times that number of guns and somewhere around 5-6,000 rounds of ammunition in various calibers. A family of four spending 6-8 hours practicing at a gun range and chatting amiably can easily burn through 10,000 rounds of ammunition. Having a variety of guns available keeps the day interesting and challenging.

This man's legally protected rights have been violated. The ACLU does not care because they will touch nothing involving firearms. The news media treats him like someone insane. Most people who take the time to comment on this incident focus on the guns and ammo and ignore the man himself, either that or they agree with the media that he is just another gun looney who deserved to be arrested.

People, there is no kind way for me to say this. You have all gone insane! By coming out against this stranger and encouraging his civil rights be violated in order to keep you safe from terrorists you are paving the way for the transformation of America from a Democratic Republic into an Aristocratic Dictatorship. Rudy Giuliani is 2462 miles from Phillip Dominguez. Giuliani's net worth is in the millions, his friends have even more, while Dominguez's net worth is probably half a million (assuming he owns his own house). Do you really not see what is happening? Do you not realize what you are bringing about? What will it take to break you away from World of Warcraft, MySpace, American Idol, and Grey's Anatomy? If you do not support Phillip Dominguez' right to keep and bear arms, freedom from search and seizure, and freedom from self-incrimination then Rudy Giuliani and his friends will someday very soon have the power to take away your home, imprison you and enslave your family.

Half a million Americans lost their jobs last year. Three-quarters of a million lost their homes. This year will be even worse. You cannot expect President Obama to take a direct, personal interest in preserving your individual freedoms and livelihood. If you do not stand up and demand the freedoms of all law-abiding Americans be preserved then very soon blood will flow in American streets as the last enclave of those who love liberty is mercilessly hunted down and eliminated.

Not long ago two border patrol agents, Ramos and Compean, were imprisoned for shooting an illegal alien while he was smuggling drugs across the Mexican-American border. An Oakland BART officer shot and killed Oscar Grant while he was cooperating with police and now we learn that investigation is going nowhere. Almost two months has gone by and the media has been completely silent on the death of Billy Joe Johnson. And then today, I learn about Fox 11's coverage of the Phillip Dominguez incident.

This is not the America I grew up in. We now have more in common with the Union of Soviet Socialist Republics than with the Republic founded in 1776. The America I grew up in believed in liberty and freedom. When that liberty was challenged, people took to the streets in tens of thousands. Oscar Grant's death generated some public outrage, but where is the outrage over Ramos, Compean, and Phillip Dominguez?

Real change does not start in the Whitehouse. Real change starts with you and I standing up for what is right. I am doing my part by writing this blog entry and sending letters to Congress. What are you doing?

Unexpected late update to Phillip Dominguez' story:

Sensibly Progressive reports having received an e-mail from Phillip Dominguez' wife. Apparently, the Los Angeles police department sent a SWAT team to search his house!

Is anyone angry yet? I am! I'm furious! Not only did they search his truck without a warrant and confiscate his guns, now they are searching his house and sending a brevy of armored men and women carrying automatic rifles to do it!

He has broken no laws and he has violated the peace and security of no one's life. Why does exercising his 2nd Amendment right to keep and bear arms subject him to police scrutiny and arbitrary raids?