PRIVATE PROPERTY - PUBLIC PLUNDER

(original post May 2011)

By James Craig Green

Today, the size and scope of American government have grown far beyond the design of the Republic’s founders. It tries to be everything to everyone - intervening in everyone’s lives for the common good or public interest. This forceful elevation of the collective over the individual has produced nothing but false hope, tyranny and unsustainable debt, undermining the markets and property rights that prevented or limited them before. In short, government, producing nothing without destroying something else, is eating America alive. The best proof for this is 16 TRILLION dollars in admitted public debt, much of it owed to foreign banks, plus another 50 trillion in unfunded liabilities for future government promises like Social Security and Medicare (See: http://www.pgpf.org/). Baby boomers are retiring, reversing their decades of positive contributions.

The American Republic began with limited size and scope to prevent it from becoming what it is today. Unlike the democratic French Revolution that produced the Reign of Terror, the guillotine and the Emperor Napoleon; the American Revolution was based on respect for the individuals and their property rights that produce the wealth all collectives need. Ignoring or minimizing property protection has been a common theme of every government, including the federal government of the U.S. It is now a bloated, destructive monster, spending almost 50% of GDP for the first time since WWII - an eightfold increase in percentage over the last century, without including the costs of its oppressive mandates. Today, it conspires against America, promoting its self-serving illusion of security over freedom while waving the flag to cheering millions addicted to its "free" lunches.

The U.S. Constitution and its Bill of Rights have been largely ignored or re-interpreted by all three branches of government, to appease every special interest that can package itself with the magic words, public interest. Presidents, congresses and courts have destroyed the Founders' dreams.

A Different Animal

Today’s American government has made important things like protection and dispute resolution trivial -- confused and diluted by an endless growth of new laws each year to appease every whim of the collective mob. The People, a phrase never or vaguely defined, encourage legislators and their friends to create huge unearned advantages (jobs, contracts, handouts, economic restrictions) for some over others, by force of law.

The law has become a hammer instead of a shield.

Some may agree with the inherent problems of today's government, but may be cautious to support fundamental changes too rapidly or too sweeping in their scope. However, today's unprecedented and unstable economic conditions beg you to consider the following:

1. Most Americans feel they are entitled to your money, and need only vote to get it - unlike the work ethic that existed before the New Deal and other government welfare programs.

2. Government should be limited to people and property protection; NOT guaranteeing jobs, insurance or success. It cannot protect your property by giving it to others.

3. The next economic crash will again be sudden and unexpected. No political action can prevent it, despite false promises from Republicans and Democrats. Words are cheap.

4. Prudence suggests a backup plan for those who still believe the economy is fixable by politics, with a soft landing. This is not your grandfather's; nor Founders' America.

5. Creating alternative networks and institutions that do not depend on government may become essential if pessimistic scenarios occur. Do you believe Obama's projections?

In 1917, the Soviet Union was created to implement the ideas of Karl Marx’s Communist Manifesto that took Europe by storm after its publication in 1848. The Soviet Union eventually failed from its forced collectivism, but not before starving and murdering tens of millions of its citizens and relegating others to lifetimes of poverty and tyranny. As a lifelong, card-carrying member of the American Communist Party once told me, Communists believe the means of production should be owned by the Public.

A Silly Little Word

There it was, stripped naked for all to see - that awful, nebulous little 6-letter word that encourages people to excuse, and celebrate, their destructive tendencies without accepting responsibility. It is that word - public - that allows the plunder of innocent people for any grand, stupid, fantastic, or destructive purpose without blaming anyone. This silly little word is why public interest is a euphemism for tyranny, public servant for parasite and public property for socialism. Almost half the land in the U.S. is owned by government, with the remainder taxed to provide a cash cow for any and all public purposes. By this measure alone, America is already HALF socialist, sacrificing essential people and property protection for too many subsidized, free-riding voters. Read the Communist Manifesto to see where progressive taxation came from.

Forceful collective action, like any lynch mob, disguises and minimizes the responsibility of each individual. This allows Democrats and Republicans to constantly grow government for the benefit of their friends, despite rhetoric to the contrary. Too many of your fellow citizens, perhaps yourself, depend on this insane collective gang bang for their livelihoods. It gets worse each year, now seeming likely that only economic collapse will stop government's cancerous growth.

Ultimately, this process will reverse itself, but not because you voted for or against someone, or promoted some public policy, or fought against a tax increase. It will happen because a sizeable minority of productive people, at great risk to themselves, with the most rare and difficult kind of courage (opposing the majority) will take back their lives and choose not to support, excuse or placate this bloated monster. At this critical time in its history, America desperately needs people like Thoreau, Gandhi and Rosa Parks more than the self-absorbed politicians who pimp for your vote so they can continue to increase government every year. Read Thoreau's Civil Disobedience.

Like so many others, American government has learned to promise endless prosperity without effort or responsibility. To break this destructive cycle, we must build new institutions that help us instead of hurt us – from the ground up, not from the top down, which has always been tried and has always failed. The U. S. Government is repeating the same mistakes of the Roman Empire and the Soviet Union, and its economy will collapse for the same reason – you can’t consume more than you produce forever. Today's unthinkable will be tomorrows necessity.

It’s long past time for Americans to take back their lives, property and dreams from a fog of collectivism and the lies that are public interest, public service and public property.

Government is the great fiction by which everybody expects to live at the expense of everybody else - Frederic Bastiat (1801-1850)

2002 DROUGHT RESPONSE REQUIRED REASON, NOT HYSTERIA

J. Craig Green, P.E.

Colorado Water Engineer

Introduction

You may not realize it, but 2012 was almost as dry as the record drought year Colorado experienced a decade ago. One reason you haven't heard about it is that water users (cities, farmers, water districts, industries, etc.) have spent large amounts of money on conservation, improved efficiency, water storage and other traditional means of drought planning since then. This routine, self-interested water planning - which takes place every year - largely goes unreported unless there is a compelling reason making it newsworthy. Except for some articles, especially in agricultural cities like Greeley, Pueblo and Grand Junction, 2012 did not create the hysteria of 2002.

In 2003, I drafted the following article in response to the 2002 drought - Colorado's driest year in recorded history (based on a century of streamflow records). More specifically, the article was written in response to an unusually large number of bills proposing to change Colorado Water Law submitted to the Colorado General Assembly (Colorado's legislature) after the drought. Too many of these proposals were poorly thought out, driven by the emotion of a record dry year.

The article was never published, but I offer it here to document the reasons why proposed Referendum A in 2003 was such a bad idea, as I expect this kind of proposal will return to Colorado politics following future drought years. If many large reservoirs on the South Platte River downstream of Denver don't fill this winter and spring, we could be in for a second extremely dry year in a row, making the kind of news stories we saw in 2002.

In 2003, I was particularly struck by the flood of proposed water bills in the 2002-03 legislative session, some of which made no sense at all, as I discussed then:

2003 DROUGHT PROPOSALS

It seems like a political opportunity to address some hot topic commanding the attention of the public-at-large is sometimes so compelling as to encourage abandoning all reason.

DROUGHT RESPONSE: REASON, NOT HYSTERIA

The record drought of 2002 and its aftermath seemed to take a toll on sanity. Water projects normally dismissed as grandiose or infeasible were suddenly models of planning wisdom. Water bills for the 2003 legislative session were stacked up like cordwood. You could almost hear the sucking sound from your checkbook as special interests hovered around the state capitol to propose multi-BILLION dollar slush funds for… well, their promoters couldn’t tell us for what.

In fact, that was what was wrong with Referendum A, soundly defeated by the voters in November of 2003. It would have created a two-to-four billion dollar increase in public debt, completely controlled by one person – the governor. Of course, the Colorado Water Conservation Board (CWCB) was to be involved, but who appoints its members? The Governor. As jaded as I sometimes get about voters’ whims, I was pleased to see this gigantic taxpayer rip-off defeated, despite all the drought hysteria under the promise of building water projects. It had nothing to do with building economical, sensible water projects – it was all about pretending to solve water problems, with a complete lack of accountability.

Since 2002, water providers throughout the state have been busy revising their drought projections based on the new realities that 2002 presented them. Water planners for cities continue to figure out what combination of new supplies, better efficiencies and more conservation makes sense in the future. Many water problems have being solved, but the climate is ripe again for legislating promises for cheaper water, which is more often wasted than conserved. Some who realize this try to make water more expensive by law, rather than allow markets set prices based on supply and demand. Politics can be a magnet for hysteria.

Water in Colorado is complicated, but there are some simple facts. Only a small part of Colorado’s water will ever likely be used by cities and industries – most of it will remain in irrigation, which currently accounts for about 85% for all water use in the state. Many farmers and ranchers were hardest hit by the 2002 drought, since their livelihoods depend on a variable, moving resource that hit a modern low that year.

About half the water used in Colorado cities is for growing bluegrass lawns, golf courses and parks. Buffalo grass takes a lot less water, withstands drought better, and would go a long way to reduce summer water demands. Cities such as Denver and Colorado Springs have led the way with their “xeriscape” programs to plant native, drought-tolerant plants and other landscaping features that use less (or no) water. In addition, cities and water districts around the state have found that putting meters on old accounts has significantly reduced water use. Ask any municipal water department manager in the state about the effect of water meters on consumption.

Less than one percent of the water used inside your house is for drinking and cooking, so claims of “thirsty” citizens as we saw in 2002 are usually exaggerated, though many lawns went brown. Denver and other municipalities have already developed financial incentives for installing low flow devices in homes and have implemented new pricing structures to encourage conservation.

Though many people want to restrict water rights sales from farmers to cities, those cities frequently provide a higher market value for water rights that agriculture could not otherwise afford. It makes sense for some farmers and ranchers to sell (or temporarily lease) water to cities, especially in dry years, but this should be done without injuring other water right owners. Colorado’s existing water court system (developed mostly from common law and free markets in water) and most water plans approved by the State Engineer are designed to prevent this injury. They sometimes fail, but the current system works well, and should not be changed to accommodate the short-sighted emotion that so often drives the political process.

Cities and other water providers (including irrigation ditch companies) have a huge incentive to solve their own problems because they answer directly to water customers. Several municipal water providers reported savings from 10 to 30 percent in 2002’s record dry summer, so the last thing they need is the State of Colorado or the feds telling them how to run their water systems. If they still don’t have enough water, they may have to conserve more – just like you conserve money when your checkbook balance is low. As cities’ experience with water meters has shown – artificially cheap (below market) water encourages waste.

The Fish

I don’t know how, but apparently a few humpback chubs and native brown trout have elected some people to represent them. They think more water for fish should be taken away from people with legal rights to that water, because cities do terrible things like irrigate golf courses. They forget cities often help fish by transferring upstream irrigation water rights to downstream cities (increasing streamflows in between), although cities, ranchers and farmers compete with fish elsewhere to reduce streamflows. Rather than buy senior water rights to protect fish (a fair solution), their representatives often ask the legislature and federal agencies to suddenly make old, senior water rights subordinate to their tasty constituents. Since Colorado water rights are property rights, this is like asking the legislature to steal your neighbor's car, which it may do if a large enough mob of voters or lobbyists wants it.

Cries of “save our water” echo at the Colorado/Utah state line as the Colorado River drops an average of about 4.6 million acre feet a year into downstream states. An acre foot is one acre of water (about the size of a football field), one foot deep - about 326,000 gallons. Colorado is entitled to use a lot more water from the Colorado River than it does now, through old (1922 and 1948) interstate agreements called compacts. Southern California’s growing demand (supplied largely from the Colorado River) could jeopardize this right in the future, because Californians are using this water (for free) and we Coloradans aren’t. Interstate water issues are the domain of Congress, not the State, so you can imagine how rational and sane those issues will be in the future. California has 53 congressional districts to Colorado’s 7, so Coloradans have a lot more control over their own city councils and state legislature than Congress. If Colorado water users don’t need or can’t afford to build the facilities they want for future demands, why not sell part of Colorado’s compact entitlement to California? There, I’ve said it. Slap my face and get the tar and feathers. Selling part of Colorado’s claim to water it will likely never use could provide the funds for developing water it can use, without taxing Colorado citizens. But, anything dealing with the feds can be touch-and-go.

Hopefully sanity will return, but as long as citizens keep running to the state capitol for more soggy handouts, I wonder. The Colorado General Assembly will probably be asked to force taxpayers to fund poorly thought out water projects and to change water laws without understanding the consequences. Will its members display the statesmanship necessary to avoid these destructive tendencies as it has in the past? Only time will tell, but I am now warning you against other, more expensive, and even insane, proposals for changing Colorado Water Law in the future such as this one, which didn't collect enough signatures to get on the ballot in 2012:

DON'T ASK STATE TO CONFISCATE WATER RIGHTS

Please be careful, and don't let uninformed promoters of political dogma destroy a beneficial water law and allocation system that has worked well for 160 years.

 

CONTRASTING GOVERNMENT AND MARKET INCENTIVES

by James Craig Green


Most people in government don't have to worry about costs, waste or efficiency, because they don't have to earn the money they receive in salary or spend on the job. Unlike money earned in the marketplace through voluntary exchange, government money is acquired by force, which destroys the price communication between supply and demand, reducing overall value and economic activity.

The profit motive in business and its absence in government guarantee this.

Government employees often benefit from waste, high costs and economic inefficiency, because a shortfall in this year's budget can be used to increase a department's budget for the following year. In other words, government usually rewards failure (high costs, waste and less efficiency), while markets usually reward success (low costs, minimal waste and higher efficiency). When, due to economic downturns (more often than not created by government), local governments do have to tighten their belts, they always cut the most important people first: police, fire protection and utilities.

Perverse and destructive incentives in local government are magnified in the federal government, since it not only has a Department of Revenue like cities and states, but it also has the Federal Reserve, which can create money out of thin air.

If printing money improves the economy, why not allow everyone to print their own? The Fed and members of Congress benefit from this symbiotic relationship, as neither is blamed for the foibles of the other. Congress gets unlimited funding without obvious taxation (inflation and public debt are hidden taxes), while the world's most powerful private banking cartel (The Fed) enjoys a monopoly for the money supply. More on this below.

The Essence of Government

When a thief takes your property by force or fraud, his gain appears to be your loss, but that's not accurate in an economic sense. What you worked hard to get, he took for much less effort, so your loss in value is greater than his gain. This is true whether the theft is illegal (a burglar) or legal (government).

Government reduces the value of goods and services in the economy because it transfers wealth by force and fraud, just like the common thief or con-man. You may believe that legalized theft (taxes, inflation, public debt, unfunded future liabilities) is justified to maintain a system of law, courts and police, but claims that the economy will be better off are almost always false or greatly exaggerated. One reason is that government today is more likely to take your property than protect it, as it has long since evolved into a wealth-destroying monster.

The French economist Frederic Bastiat (1801-1850), in THE LAW said the primary purpose of the law is to protect people and their property. But, as soon as it begins to transfer wealth by force, it violates that primary duty. He also said the use of collective force can only be justified by its duty to protect the individual's right to use force to protect himself and his property. Today, government spends much more time and effort transferring wealth by force than performing its primary duty, which is to protect people and their property.

You might argue that a certain amount of force is necessary to maintain order, protect people and provide a system of dispute resolution, among other things. But, when the American Republic was created by the U.S. Constitution for such purposes, its powers were severely limited. Its first ten amendments, known as the Bill of Rights, listed individual rights considered to be superior to the collective powers of government. Please read the NINTH AMENDMENT to the U.S. Constitution. While you're there, also read the TENTH AMENDMENT, which limits the powers of the federal government to those stated in the Constitution.

Over the last two centuries, American government has consistently shifted away from the limited use of its force justified for protection, to an almost unlimited use of force for transferring wealth, without regard to individual rights. The Constitution has been ignored and re-interpreted to accomplish this, especially among lawyers, judges and politicians who have become high priests in the cult of unlimited government power. This has corrupted almost all elements of American society and will destroy its economy unless this trend is reversed. See MARKETS WORK - GOVERNMENTS DON'T, CRONY CAPITALISM and WHO BENEFITS AND WHO PAYS FOR GOVERNMENT?.

Voluntary vs. Involuntary Transfer

To further explain the relative value of voluntary vs. forced transfers of wealth, let's say a thief steals your car. Clearly, he gains, and you lose, but it's not that simple. Since you earned the money you spent on the car and its features reflect your own individual choices, it is worth more to you than to the thief, who spent much less effort acquiring it, and with much less careful thought about how it fits his particular wants. This means that every act of theft, while benefiting the thief, hurts the economy.

If you paid say, $20,000 for the car, it means you wanted that particular car, at that time, more than you wanted the money (cash or credit). The dealer who sold it to you may have hundreds of cars, for which he pays less (wholesale) than you (retail). Therefore, he wants your $20,000 more than the car, to gain his profit. This is a market transaction, since both parties improve their satisfaction by giving up something they want less to get something they want more. When the thief steals your car however, it is transferred from someone who values it highly to someone who values it less. This creates an overall loss of value, in addition to the obvious, but inaccurate, view that $20,000 of value was maintained; just moved from one person to another. This reduction in value remains even if the thief sells your car to someone who values it more than him, but less than you.

I credit my most recent, improved understanding of this concept to my friends and professional economists Paul Prentice and Penn Pfiffner, who teach different versions of their Free People, Free Markets course in Colorado. Their classroom demonstration of the Demand Wizard is brilliant, elegant and insightful. Tomorrow, I will dedicate an entire article to the Demand Wizard.

Government gets money the same way as the thief (Bastiat called it "plunder"), but the process is sanitized, legalized and characterized as something good instead of bad. When you peel the onion away from government lies, half-truths and exaggerations however, you find a much different reality than you learned in government schools. Since politicians, government-subsidized businesses and government workers all benefit from this unsavory process, most never think of their careers as working for the Mafia, or adversely affecting the economy. In fact, government is much worse than the Mafia, because its lies, half-truths and exaggerations are hidden, popular and much more difficult to understand than the common thief, especially among government employees themselves. See SOLAR JOBS.

This means the real value or real need for government services can never be determined. As the great Austrian economist Ludwig von Mises pointed out in his 1951 book SOCIALISM, economies based on force rather than exchange have no rational way to determine the price that will balance supply and demand, nor the incentive for government officials to even try. This is why the Soviet Union produced chronic shortages of poor quality goods, the tyranny of a police state and the starvation of millions of people from the forced collectivization of agriculture and its entire economy. America is already a long way down the same path. President Obama is the highest priest, the culmination of more than a century of the stifling collectivist ideology of the Soviet Union, applied most successfully in the U.S., not the Soviet Union or Russia. See Chart 5 in HERITAGE on GOVERNMENT SPENDING and REVENUE.

There are exceptions to this, but they are trivial. For example, some government agencies produce goods and services that customers may choose to buy or not, like maps, books and other optional services. The Colorado Division of Wildlife has funded its annual operating expenses, including salaries, from fishing and hunting license sales.

Government Workers Don't "Earn" Their Salaries

Let me explain what I mean that government workers don't earn the money they get. In the marketplace, goods and services are exchanged based on voluntary transactions, producing a net benefit to both parties involved, and therefore to society. But, each act of theft, legal or illegal, reduces society's wealth, as I have discussed. This does not simply transfer the same value from one person to another, but diminishes its overall value in the economy.

Through government subsidies, establishing government-sponsored monopolies (like the Fed) and other forceful interventions into the economy by government, private businesses quickly learn that the State provides them with immediate benefits without risking legal recourse for damages, intended or not. Most don't realize that government can only steal, cheat and otherwise hurt others to provide those benefits (with few and trivial exceptions). This is the addictive allure that corrupts many businesses, as their profits increase and risks decrease when they provide services to government. Occasionally, police, enforcement agents and other public employees get caught red-handed doing something so outrageous that their normal immunity as government employees is set aside, but this is the exception rather than the rule. This is being brought to the attention of the public more than ever before, due to the proliferation of cell phone videos and YouTube.

It is more lucrative and less risky to defraud, control and steal with the legal sanction of the state than without it. This makes today's governments, at all levels, much more dangerous and destructive than smaller, limited ones focused on citizen protection. Despite mottos seen on some police cars ("to protect and serve"), police spend most of their time enforcing laws passed by legislatures controlled by special interests. Law Enforcement is not protection, except by coincidence on occasion.

The Federal Reserve, a private banking cartel, was given a legal monopoly over the money and credit of the United States by Congress in 1913, the same year the Income Tax was created. Unlike the Income Tax however, the Fed was not the result of a Constitutional amendment, but just an act of Congress. This means any future Congress could abolish it, without affecting the Constitution. See my recent paper on the Constitution, SUBORDINATE ACTS.


Give me control of a nation's money and credit, and I care not who makes its laws.
--Mayer Amschel Rothschild


Conclusions

In short, free markets and government limited to protection are more like a good parent: protecting the freedom to prosper, but not guaranteeing success. See THE LITTLE BOY WHO COULDN'T FAIL. Today's government, on the other hand, is like an abusive or too-permissive parent, transferring wealth from those who produce it to those who don't, by force. It corrupts individuals and businesses by offering its generous benefits without the stigma attached to its theft-laden revenue agencies. It's law, always designed to protect and enhance government above all other considerations, is widely accepted, even when overstepping its bounds (a common feature of government monopolies). Although there may always be theft, fraud and aggression, today's large, oppressive governments encourage and subsidize it, while markets tend to minimize it. Most people, educated in government schools for two-thirds of their formative years, think otherwise, considering its law to be, at worst, a necessary evil for society to function and at best, a cornucopia of wealth from little or no effort.

These are ignorant, naive beliefs from the indoctrination of children in government schools. In fact, mandatory, free public education was the tenth plank of Karl Marx's COMMUNIST MANIFESTO (Scroll to the end of Section II, Proletarians and Communists, for his list of ten planks).

Unfortunately, government almost always creates more problems than it solves and makes the economy worse with each intervention, while failing to accomplish its most important task - the protection of people and their property. America would be much better served by restoring the Founding Fathers' vision of limited government instead of today's unsustainable, bloated monster that promises everything to everyone, for "free."