Global Warming Realities

The subject of Global Warming, like most of the currently-in-vogue environmental issues, creates lots of hype and dogma, lots of politics, and very little serious discussion. Although many of the more vocal pundits claim scientific backing, the fact is that the scientific community is as divided on the issue as the rest of the populace, and the actual facts in evidence are ambiguous as to what conclusions can be drawn from them.

One fact that the scientific community is in agreement on is that we are currently at the warm end of what is referred to as an 'interglacial' warming period. These interglacials have happened periodically over many millions of years, but most of the intervening time is spent in 'ice ages'. The current average temperature is definitely above the average temperature over millions of years, but not out of line with temperatures at the end of previous interglacials.

A mathematical principle known as 'regression to the mean' is a fancy statement of the fact that, all other factors being equal, the direction a change in a variable (global temperature in this case) is most likely to take is toward the long term mean value. This would seem to indicate that what we should worry more about is not global warming, but global cooling. Sooner or later whatever drives the long-term ice age vs. interglacial cycle is going to send the temperature down and it may well be beyond human tinkering to stop it. However, it also may be a thousand years before such events unfold.

Be that as it may, there is no doubt that human impact on our home planet is non-trivial. Although there is little likelihood that there will be a runaway greenhouse effect and Earth will end up another Venus, sooner or later (probably sooner) we are going to precipitate some sort of ecological crisis or catastrophe. Neither Al Gore nor I know exactly what this will be or when it will happen, but new laws about carbon dioxide emissions are not going to solve the problem. The problem is not SUVs, coal fired generating plants or eating meat. The problem is plain and simple - there are too many people on the planet and the numbers are increasing exponentially. No amount of new laws, new technology or donations to 'save the environment' Funds will solve the problem. The human species must regulate its numbers or nature is going to do it for us.

What is particularly distressing is that reducing the population is never discussed as a solution to solving such problems. Instead we are constantly bombarded with campaigns to ‘save the children’, cure AIDS, increase health services to developing nations, etc. Although these proposals are commendable, increasing the population by reducing diseases, famines and wars and in addition increasing the standard of living of the third world is a guaranteed strategy for disaster. If increases in survival rates are not more than matched by decreases in reproduction rates we are only dooming everyone to disaster.

Drug Laws

With the patchwork legalization of marijuana in the U. S., and now with the total legalization in Canada, this reprise of an essay* which I wrote in the late '80s is even more relevant.

The attempt to deny the use of various drugs to the individual creates a problem in several ways. Human desire is always augmented by denial, especially among the young. Thus the law denying use is in fact a significant contributory factor in increasing the demand for drugs. This artificially high demand, which cannot be met by a legal market supply, generates a highly profitable opportunity for the criminal element. The government, in its misguided enforcement of drug laws, guarantees the criminal suppliers a monopoly on the market which results in ridiculous prices for what would otherwise be economically uninteresting commodities.

This fortuitous combination of augmented demand and market monopoly created by drug laws for the enterprising criminal is enhanced even further by the addictive nature of the 'harder' drugs. Once 'hooked' the hapless user becomes the perfect repeat customer - he has no choice but to do business no matter what the price. Unfortunately for him, the criminalization of the use of the drug virtually guarantees that the victim will be unable to seek help for his problem.

The bottom line is that the drug problem is a problem in economics, not morals, not health, not even safety, whether or not any or all choose to view it as one. In a way this is fortunate, since the solution is valid whether or not all agree on the moral issues. Legalization will instantly eliminate the criminal market monopoly and quickly drive the pusher from the streets. For an example of this one has only to look at the impact on the organized crime numbers rackets when the legal lotteries were created. Why do business with thugs when you can buy a ticket to win millions at the corner convenience store?

Why is it so hard for the supposedly moral crowd to view a moderate problem with some abuse of drugs by a few as preferable to a gargantuan problem with burgeoning crime? Even the Women's Christian Temperance Union finally understood by 1933 that they had created more moral problems than they had solved.

A POSSIBLE COMPROMISE

Although the lessons of history and the analysis of the current situation clearly point to total legalization of all drugs, such an enlightened reform is unlikely in the unenlightened Puritanical society of modern America. However, just perhaps an acceptable compromise can be struck that would be palatable to all but the most recalcitrant pseudo-moralist. The following solution is proposed:

1 The possession of drugs (or anything else for that matter) be forever removed from the abusive control of government - a Constitutional Amendment denying all present and future aspiring tyrants control over personal ownership per se of anything.

2 Legalizing the sale of marijuana products on the same basis as alcohol products.

3 Limit the sale and distribution of 'hard' drugs to licensed dealers (a generalization of the current prescription drug monopoly of the medical fraternity).

4 Create a network of private, or even government run or subsidized, drug rehabilitation centers staffed by licensed distributors from (3) whose function would be to provide drugs (with appropriate medical and psychological care) to anyone who demands them, but with the primary objective of eliminating the demand.

This proposal recognizes the three primary principles discussed earlier. The criminalization of the citizen is eliminated by legalization of both possession and use of drugs. The former is recognized as a fundamental freedom and abuse of the latter is recognized as a medical or psychological problem, not a crime. The role of law is reduced to control of sale and distribution, which is a more defensible government involvement, and in particular avoids the fatal mistake of trying to legislate denial to adult, law abiding citizens. Lastly, the rehabilitation centers provide both an opportunity for society to help the drug user and, just as importantly, the denial of a market with excessive economic gain to the illegal distributor.

*from Musings and Rants, Marcus Everett 2016, CKCPC3 Publishing; p.14

Democracy is Not a Panacea

Back in the early 1980s Mikhail Gorbachev visited the United States, presumably to learn why we seemed to be much more prosperous than his communist dictatorship. If I remember correctly, he was shown through a few stores and was 'blown away' by the cornucopia of goods available to the US consumer. He returned to the USSR with a determination to try to apply what he had seen to improving the lot of the Russian people. The problem was, he went away with the wrong impression.

Gorbachev mistakenly believed that the success of the US and the rest of the West was due to the fact that they were 'Democracies'. Apparently this was in part due to an overwhelming majority of Westerners also believing the same, so much so that leaders such as George W. Bush have tried to export Democracy to the Third World, mostly with disastrous results. Gorbachev returned to the USSR with the intent of moving toward a Socialist Democracy. This had in part the positive result of the collapse of the Communist Soviet Union, but did not lead to the economic results he had hoped for.

What Gorbachev and the others do not seem to appreciate is that it is Capitalism and the Free Market (CFM) that is the secret behind the overflowing shelves of the Walmarts and the like of the Western World. Exactly which form of government is most compatible with CFM is certainly debatable, and may yet to be determined, but Democracy has been shown to be only MORE compatible with CFM than Communism, at least in the short run. China's economic success as a result of embracing more CFM in spite of retaining a totalitarian government illustrates my point. However, the degree to which China's rulers interfere with the Free Market may yet be its undoing.

The point to be made here is that Democracy is not the source of wealth and prosperity, nor is it even a guarantee of such that comes with CFM. In fact, pure Democracy may tend to destroy CFM in that allowing universal suffrage seems to engender anti-capitalist government. The envy of the lower classes of those that succeed in CFM leads to legislation and regulation that ultimately stifles economic activity. The egocentric nature of the individual that, because of Adam Smith's "invisible hand", produces the benefits of Free Markets is very detrimental to the same when lumped together to produce governmental laws and regulations. It is not unrelated that the West, as it has become more democratic, has also become more socialistic.

Austrian economic theory points out that economic control of production by a governmental body is a guarantee of disaster because, as Ludwig Von Mises noted, it cannot solve the problem of what he termed 'economic calculation'; i.e., it fails to properly ascertain what products to produce in what quantities. In the extreme case of such control as was the case in the Communist USSR, the result was disastrous. Unwanted goods piled up while the populace stood in lines for bread.

It is very unfortunate that, as the Western Democracies become more and more socialistic, the economic failures are blamed on Capitalism and Free Markets. This is the basic flaw with Democracy, in that when the mob is in control they will never admit that the problems they create are their own doing, and only total collapse will end the errors.

Income Taxes, Consumption Taxes and Tariffs

Currently (April 2018) there is considerable debate raging as to the wisdom of the Trump proposed tariffs. As one more opinion on the subject, I would like to frame the argument in terms of who pays for maintaining the U. S. marketplace rather than in terms of punitive actions and retaliatory reactions in the form of tariffs.

Since the government's income in the U. S. is primarily derived from taxes, and in particular from income taxes, the government's costs of providing the infrastructure - currency, roads, courts, etc. - is paid in this country by the individuals and companies (which again boils down to the individuals) that pay the income taxes. Thus the participation in the U. S. markets by foreigners is a free ride since they do not pay U. S. income taxes. This is why U. S. made goods do not compete in both domestic and foreign markets.

The use of tariffs to level the playing field does provide a mechanism to make foreign sellers contribute to the costs of maintaining the marketplace they are enjoying, but it requires much legislation and regulation to target which goods and who's selling them. This in turn engenders hostility in those targeted and invites the 'trade wars' that are the current concern of the chattering classes. A flat tariff might be preferred in that it would be less 'in your face' to the trading partners otherwise targeted, but it still reeks of hostility to 'free trade'. It also does nothing to make U. S. goods more competitive in foreign markets.

To this author, a better solution is to replace the income tax with a National Sales Tax on all new goods. With respect to incoming foreign goods this serves the same purpose as a tariff - it makes the foreign producer pay his fair share of the support of the U. S. market. It relieves the exported goods from the income tax burden that makes U. S. goods non-competitive internationally. It allows U. S. workers to compete with foreigners as well as non-taxpaying illegals. It invites less hostility since it applies to domestic as well as all foreign goods equally. It requires no additional infrastructure to assess and collect tariffs. And as a huge added incentive, getting rid of the income tax would do more to restore health to the U. S. economy than any other single action.

Replace the income tax AND potential tariffs with a National Sales Tax. A win-win-win solution.

Who pays the National Debt?

With the 'official' national debt over $20 trillion (and many times that in unfunded liabilities such as pensions, Social Security, Medicare, etc.), I keep hearing from the chattering classes that we are leaving our children to pay for our sins. I don't agree with this, although we are in the process of leaving our children with a failed United States which will be much worse that just a debt to pay. However, let's look at the debt claim for now.

Some time about 1990 I wrote an essay about funding government comparing taxing, borrowing and inflating the currency. In discussing financing the government in part with government bonds, I said:

"Since those called on to pay the final tab are likely to be later generations, there are serious questions as to the morality of borrowing to finance any expense of government. It is a cruel joke to buy a Savings Bond for little Johnny's birthday when, in fact, little Johnny will be called on to pay for it several times over when he grows up.

Actually, the above paragraph is not quite correct. Borrowing by the government from either domestic or foreign sources does represent a debt that must be repaid at a later date with interest. However, when the Federal Government ’borrows’ from the Federal Reserve, we are witnessing nothing more than sleight of hand attempting to hide the fact that what is really happening is inflation of the currency. That portion of the National Debt that is held by the Federal Reserve represents only the amount of fiat money created by the government. If it were ‘repaid’, (money removed from circulation by taxes, returned to the Federal Reserve to ‘retire’ the debt, and then both parties burning their little pieces of paper), we would have deflation of the currency. This is just not going to happen."

As this implies, the Federal Reserve portion of the National Debt is not paid by our children in years to come, but in reality is paid now by those of us who are foolish enough to have our savings in dollar denominated investments. The dilution of the currency (monetary inflation) that is effected by the Fed 'loaning' money to the U.S. Government by buying its bonds is paid by savers immediately by devaluing their savings. Paying off the Fed bonds at a later date would deflate the currency, and would be a bonanza for those that had a dollar left, but the political class would rather leave the currency inflated to avoid the effects of deflation.

The parts of the National Debt that are held by citizens and by foreigners will have to be paid or the Government would have to default and declare bankruptcy. If real entities buy Government bonds, it removes the money from circulation that the Government then returns by spending it. When the Government taxes the economy to get the money to retire the bonds, it then returns it to the bond holders. These are net-zero operations - no currency is created or destroyed. Even if the Government defaults in the middle of this, there is still no net change in the currency - the Government spending of the money borrowed from the bond buyers has already returned it to circulation, and this is then effectively paid by the bond holders.

However, default is not going to happen with the Government controlling a fiat currency. Politically the final reckoning can be delayed by monetization of the debt until the currency collapses with hyperinflation. This is the most likely scenario. Little Johnny will be paying for our sins, but not with dollars.

It is worth pointing out that if we had a gold or other commodity backed currency, the scenario would be different. Firstly, there would be no Federal Reserve buying bonds with funny money, so by now no one with any financial savvy would be buying bonds and the U.S. would not be passing trillion dollar 'budgets'. Secondly, the bonds that have been sold would have to be repaid with undiluted currency or the Government defaulting, so our progeny would be on the hook in a more real sense than what currently exists. Of course, even when we had a supposedly gold backed currency, the Government just stole the gold, inflated the currency and ultimately declared the dollar a fiat currency. The end result is always the same. See the previous paragraphs.

Sales Taxes vs Tariffs

With the President pushing tariffs to level the international playing field for American producers, he and his administration should seriously consider a National Sales Tax (NST) as an alternative or at least in concert with targeted tariffs. By getting rid of the Income Tax (IT) and replacing it with a NST, the burden of maintaining the U.S. market is shared by all who participate in it.

Let's first look at the current situation with the cost of the U.S. Government being primarily carried by U.S. citizens under the IT. Even with the new 'tax reform', a dollar earned by a typical citizen is first reduced by 25 cents with federal IT and a nickel for payroll tax. Then in most states, at least another nickel is appropriated by state IT, and a further nickel in state sales tax on the products bought with the 65 cents remaining. Thus the American consumer loses a third of his buying power regardless of where the products originate.

The labor cost for the U.S. producer is the full dollar cited above plus the employer's share of the payroll tax, plus of course any additional overhead for health benefits, etc. If the employee then buys his company's product, he is in effect paying, say, $1.10 (just for the labor costs) for which he netted about 60 cents. His own labor is costing him twice what he received for it.

The additional cost of a tariff on the imports used in making a given product could vary widely, but even for an equivalent product (a TV or an auto) subject to a tariff, the consumer ultimately pays the extra amount with the reduced buying power of his taxed income.

If the income taxes (and payroll taxes) are replaced by a NST of 30% (the rate proposed by the Fair Tax), the consumer will pay $1.30 for the labor share of a domestic product for which he received $1.00, or about 30% more. He will still bear the extra amount of a tariff, but with a net income of the full dollar rather than 60 cents. The tariff will still penalize the foreign producer relative to the domestic producer, but the impact to the U.S. consumer is a third less.

Even without a tariff, a NST taxes the foreign product at the same rate as the domestic product. This not only levels the tax burden between the foreign and domestic producers, but considerably enhances the competitive position of the domestic producer in the foreign markets since there is no taxation on labor for exported products. And, since the product rather than the labor involved in producing it is taxed in the U.S. market, automation and foreign labor (or even undocumented labor) hold no advantage for the domestic producer.

As we see, in many respects the NST achieves the same result as an import tariff, with considerable benefit to domestic production and consumption as well. Since all imports are equally affected, a retaliation in the form of a 'trade war' is unlikely. If, alternately, a penalty is intended for a given country's products, selective tariffs can still be imposed for political reasons.

The use of a National Sales Tax instead of the fatally flawed Income Tax is a no-brainer, but implementation in the short run begs caution based on system engineering considerations. Step functions - a sudden major change in inputs or characteristics in a dynamic system - can produce wild deviations before ultimately settling out to the long term behavior. Thus, although the NST in the long run is to be preferred, ramping it up as the IT is ramped down (say over 5 years) may be necessary. However, in no way must the IT be allowed to exist past the phase-out period. Ultimately the 16th Amendment must be repealed, and ITs forever banished in the U.S.

An Ethical and/or Moral Conundrum

I apparently either read or was aware of John B. Calhoun's mice and rat experiments in the 1960's and '70's and have used the phrase "too many mice (or rats) in a cage" frequently as a comment on the ever increasing problems due to population growth. I had assumed that the problems of Calhoun's mice, their extreme population growth followed by their ultimate total demise, were due to overcrowding, as apparently most people had. There is little doubt that overcrowding played a part in their abrupt change in behavior, but ultimately other factors may have contributed to the final result. A recent VDARE.com post by Lance Welton was an eye-opening re-appraisal of the reasons for the disasters, and their application to human populations.

As was discussed in the post, the affluence of the West made possible by the Industrial Revolution and the attendant decrease in mortality resulting from better nutrition, better medical care and an overall rise in the standard of living has virtually erased natural selection from the first world human population. Now most people think of natural selection as improving a species, or allowing a species to cope with changes in their environment, but there is also a very necessary weeding out of negative attributes. In addition to the occasional mutant resulting from environmental accidents, sexual reproduction intentionally tries many variations of genetic characteristics. In the natural state, defective combinations usually fail to reproduce. But in the modern human Welfare societies, we go to extreme efforts to salvage every fertilized human egg. Thus defectives have a high likelihood of not only surviving, but reproducing. As Welton noted, these defective genes are then able to spread throughout the gene pool, thus debasing it. This does not bode well for Western societies.

There have always been some doubts as to whether 'helping' people is always desirable. The old truth that giving a man a fish feeds him for a day but teaching him how to fish feeds him for a lifetime emphasizes the relative importance of education over welfare. In addition, however, giving him a fish may feed him for the day, but it also encourages him to resort to looking for another handout the next day rather than trying to feed himself. This shows that charity can produce cultural distortions that, if allowed to fester and reproduce, are as detrimental to societal health as genetic defects. One must conclude that charity or welfare for all but the most disabled is not a good idea, and even sparing those that cannot survive without help still poses a question of whether they should be allowed to reproduce.

To paraphrase an old wheeze, it's not nice to try to frustrate Mother Nature. Our culture frowns on the subject of eugenics, where the term is referring to attempts to intentionally improve the gene pool (although animal breeders have been using it for ages). But in effect we have, for the last couple of centuries, been practicing what might be called inverse eugenics, where, by frustrating natural selection, we are unintentionally debasing the human gene pool. What seems to be a noble principle of taking care of the less fortunate members of our society has a dark side. This creates what seems to be a moral or ethical dilemma. We must take steps to counter the reproduction of defective genes, or humans will suffer the same fate as Calhoun's mice, at least in the Western welfare states,. As Welton observes, this seems to be further along than we would like to think.

The moral dilemma is that any attempts to purge defective genes flies in the face of religious and cultural taboos. Even current research trying to edit genes before they can be passed to future generations is under attack, and sterilization or worse is virtually unthinkable, especially if it can be labeled genocide. Yet ignoring the problem may well not be an option. Although termination of carriers of defective genes would be a repugnant and unnecessary extreme, rethinking Western Civilization's religious and cultural proscriptions against abortion, testing of fetuses for genetic abnormalities, and sterilizing obvious mutants might be necessary.

There are some things that can be done to stop making the situation worse. A first mandatory step in the U.S. would be to stop importing defective genes from third world populations. Whether any immigration is necessary or desirable, a minimum response to the problem must be to set the bar for admission very high for genetic traits such as intelligence and industriousness, and against negatives such as criminality and genetic diseases. In their native environments a significant number of third worlders would perish from natural selection, but not only do we keep them alive if they get here, but pay them to breed. This is insane.

The second step of a sane response to the problem is to stop paying welfarites to breed. Although not every welfarite has defective genes that cause diseases, the likelihood that they have undesirable genetic characteristics is sufficiently high that encouraging the propagation of their genes is a poor policy. Trying to test for bad vs. good genes in the welfare community smacks of eugenics, and therefore it would be best to just not provide public reward or even support for welfare breeding.

Forced sterilization is a solution of last resort, although it might be worth seriously considering in the case of those convicted of violent criminal behavior. Short of refinement and acceptance of genetic engineering to eliminate less blatant cases of defective genes, voluntary contraception or sterilization would be commendable, but as a compassionate society one hopes that such drastic measures could ultimately be unnecessary with technology. Currently abortion or sterilization of Downs Syndrome children is tolerated or even encouraged, but ultimately gene editing or other high tech solutions may be able to identify and remove such defective genes from the gene pool.

The problem of affluence frustrating natural selection is sufficiently subtle that its magnitude has only recently come to light. As was pointed out in Welton's post, we are already seeing increases in genetic diseases such as autism, and a decrease in intelligence. Western civilization is already mired in a morass of problems, although many may be related to this one. In any case, as Welton said, we're headed for a disaster, and time to reflect may not be on our side. Some form of eugenics to offset the inverse eugenics of Western civilization's incredible survival successes is necessary.