This financial mega-mess is the same sort of event as the collapse of the USSR’s centrally planned economy, another economically unworkable Rube Goldberg apparatus that was kept going, more or less badly, for decades before it fell apart completely. Along the way, of course, famous (yet actually unsound) economists assured the world that everything was working out splendidly. As late as 1989, when the pillars were crumbling on all sides of the temple, Nobel Prize winner Paul A. Samuelson informed readers of his widely used textbook, “The Soviet economy is proof that . . . a socialist command economy can function and even thrive.”

In the future, we will see a similar breakdown of the U.S. government’s Social Security system, with its ill-fated pension system and its even more inauspicious Medicare system of financing health care for the elderly. These government schemes are fighting a losing battle against demographic realities, the laws of economics, and the rules of arithmetic. The question is not whether they will fail, but when–and then how the government that can no longer sustain them in their previous Ponzi-scheme form will alter them to salvage what little can be salvaged with minimal damage to the government itself.

Our political economy is rife with such catastrophes in waiting, yet the public always seems startled, and outraged, when the day of reckoning can no longer be deferred, and another apartment collapses in the state’s Hotel of Impossible Promises, loading onto the taxpayers more visibly the burden of sheltering the previous occupants.

Each of these time bombs has at least one element in common: it promises current benefits, often seemingly without cost; but if it must acknowledge a substantial cost, it places that burden somewhere in the distant future, where it will be borne by somebody else. From the standpoint of society in general, every such scheme is a species of eating the seed corn. It satisfies the public’s appetite to consume something for nothing right now, with no thought for the morrow. It represents the height of irresponsibility by permitting people to live higher today than they can truly afford, financing this profligacy by borrowing recklessly and by taxing politically weak and ill-organized people in order to shower benefits on politically strong and well-organized special interests.

Call it democracy in action or utterly corrupt governance; they are the same thing.

The architecture of the Hotel of Impossible Promises is not arcane. All competent economists understand these things. Ludwig von Mises explained as early as 1920 why a centrally planned economy could not work as a rational system of allocating resources. The reasons why Social Security, especially its Medicare component, and many other such government programs contain the seeds of their own destruction have been explained time and again. Are the politicians who construct these structures really such idiots that they cannot understand the logic of what they are doing?

Not at all. But they are not striving to create economically viable institutions that serve the general public interest; they are feathering their own electoral nests in the only way they can in the context of our political institutions. As H. L. Mencken explained back in 1940, the politicians “will all promise every man, woman and child in the country whatever he, she or it wants. They’ll all be roving the land looking for chances to make the rich poor, to remedy the irremediable, to succor the unsuccorable, to unscramble the unscrambleable, to dephlogisticate the undephlogisticable,” because they understand that “votes are collared under democracy, not by talking sense but by talking nonsense.”

And are members of the public so dense that they will fall for such promises? Yes. Moreover, they are greedy, impatient, and immoral, because the present benefits they hope to gain via politics, however unsustainable in the long run, come entirely at the expense of the taxpayers from whom the government extorts its revenues.

“Politics, under democracy,” Mencken wrote more than 80 years ago, “resolves itself into impossible alternatives. Whatever the label on the parties, or the war cries issuing from the demagogues who lead them, the practical choice is between the plutocracy on the one side and a rabble of preposterous impossibilists on the other.” And in a declaration even apter now than it was at the time, he concluded that what democracy “needs beyond everything is a party of liberty.”

The trouble is, however, that now, even more than then, the American people have little interest in liberty. Instead, they want the impossible: homeownership for those who cannot afford homes, credit for those who are not creditworthy, old-age pensions for those who have not saved, health care for those who make no attempt to keep themselves healthy; and college educations for those who lack the wit to finish high school. Moreover, they want it now, and they want somebody else to pay for it.

If you think that Fannie and Freddie’s bust is a big deal, just wait until Medicare comes crashing down. Then, the wailing and gnashing of teeth will be truly unbearable. As that day rapidly approaches, however, you’ll notice that the politicians are doing utterly nothing to forestall it.

A reader who recently attended a high-level security seminar along with a number of US government infosec employees has given me permission to post his description of the event...

Bona fides: The instructor spent 9 years sitting in the back seat of a USN spy plane. Most of the students (all but one or two of 22) were either current or recent past US government high level IT employees. One was a current DHS systems guy. Another was recent ex-NSA infosec. Several more were chief network security admins for Pentagon and the like.

Here is the scoop. We were discussing secure erasure of magnetic media, and a comment was made about recovering data using electron microscopy (to read remnant magnetic patterns in layers beneath current data) after a 7-pass overwrite (DOD standard for secure erasure - the presumed state of the art for wiping data.). I stated my belief that such a procedure had to be prohibitively expensive and that, absent becoming a"person of interest" to the NSA, should probably not be of concern. My statement went unchallenged by the instructor, but the ex-NSA guy was looking directly at me, with a friendly smirk, and shaking his head"no". On the next bathroom break, I asked him if he was implying that the procedure had become economical. He replied in the affirmative, and added that he was aware of a single DHS laboratory with five electron microscopes in 24x7 use for this purpose, and that other labs undoubtedly exist.

So now we know what happens to a TSA-confiscated laptop, and probably to many that are listed by the owners as as"missing or stolen in airport". The following day, class disucssion topic was techniques for limiting employee access to web pages at work. The DHS systems guy stated that the method currently under discussion would not work for him"because we have five sections that do nothing but look at libraries". Remember the incident a couple of years ago where the two DHS goons announced to patrons in the Maryland public libnrary that they were there to stop them from looking at porn, etc? The disclosure may have been unintended by TPTB, but evidently the attitude truly reflects DHS philosophy. Time and concerns about self-identifying as an anti-government person kept me from making further inquiries, but that certainly does not sound encouraging.

Going forward, the assumptions must be that no information that is not very securely and correctly encrypted is even remotely safe, Big Brother is watching everything that we do at the public library (in person or on-line), and the only way to securely erase data from magnetic media is to melt or completely incinerate it and scatter the ashes.

[cross-posted at Austro-Athenian Empire]

Looks like a hymn to the warfare state is heading to a cinema near you.

A reminder: Big Head Press offers free online graphic novels by the inimitable libertarian-likes of L.Neil Smith and Scott Bieser. Click here to access.

I am tempted to try to accumulate examples of this phenomenon, but the problem with that is, since this is a broad cultural phenomenon and we are all part of it, the natural reaction will often be something like, "well that one's not a good example, because those particular bastards had it coming."

But surely examples are not necessary. American leftists must know in their hearts that for at least six or seven years their attitude toward GeorgeW. Bush has been one of more or less pure hatred. And those on the other side can remember the eight years of Clinton-hating that preceded that.

The neo-Tocquevillian idea that participating in the modern democratic state is something that draws us together into a national conversation about common goals and aspirations is turning into an ugly joke. What I see, more and more, is mutual hatred and suspicion.

Admittedly, there have been times when the level of discourse was in some ways much worse than it is now. It was no doubt worse on the day in 1855 when Congressman Preston Brooks of South Carolina beat Senator Charles Sumner senseless on the floor of the Senate with a walking stick. There is another way in which those days were different, aside from being even more angry and hateful: in those days, there was an obvious reason for that anger and hatred. The single issue of slavery set citizens against each other in conflict that admitted little or no compromise.

Today, there is no such single issue. There is a reason, though, and it is one that in a subtle way may be worse that the one that underlay the Brooks-Sumner sort of conflict.

Today, it is the system itself that sets people against each other. When we participate in any political process nowadays, we always face opponents who to seek to impose some coercive policy or other on us. They may want to to spread American-style democracy by deadly means around the world, in your name and at your expense. They may want to provide free health care for all, a policy that is not by any means free. They may want the police to scare you out of your dependence on a variety of substances, from heroin to trans-fats and beyond. The policies I have in mind vary widely, but they all have one thing in common. In every case someone seeks to to achieve some goal that is their and not yours -- whether that goal is to line their own pockets or achieve their personal vision of the good society -- at your expense. There is no way to see this as a positive-sum situation. One man's gain is another's loss. If they win, it is because you lose, and vice versa.

We have reversed von Clausewitiz: Politics is civil war carried out by other means. The really sad truth is that our mutual hatred and suspicion are well grounded and more or less rational.
We, the rest of us, the world minus you, really are your enemies. Every time there is an election, we are trying to thwart your interests and ideals by coercive means and force others on you instead. Aside from the handful of individual rights codified in the Bill of Rights, there really are no limits to what the rest of us are willing to do to you, and will do, if we get the chance.

Of course, alternative systems are conceivable. I can conceive of at least two: 1) We might let the nation state disintegrate into smaller and smaller units, until any given state is inhabited only by people whose interests and standards of value are perfectly harmonious. In many cases, the number of these fellow citizens will be exactly one. This I admit is not very practical. But there is an alternative. 2) We could limit the powers of government to only doing things that are genuinely in everyone's interests, such as maintaining public order and providing certain other "public goods."

I realize we are not going to do either of these things any time soon. But then I do not anticipate the return of civility any sooner than that.

Republicans insist that people should pull themselves up by their own bootstraps. Communities should take care of their own and not depend on big government to do the job. And the folks who do make it should give back.

We agree wholeheartedly.

But on what is the job of community organizer premised, if not those very principles?.

After endorsing small government for the first time in its history, the Sun-Times, then lavishes praise on Obama for his altruistic record of"working with the poorest and most powerless people on the South Side of Chicago, doing his damndest to help them help themselves.”


Based on what I know, Obama's" community organizing" had little to do with helping people help themselves by pulling themselves up by their own bootstraps. It mostly consisted of a well-coordinated high-pressure campaign by paid"organizers" to force taxpayers to pay for services that should be provided voluntarily. That is not mutual aid, at least in the sense that Tocqueville understood it when he described how Americans formed voluntary associations to build hospitals, churches, and roads.

With some exceptions, community organizers of the Obama type run shakedown operations. True, they give people advice but the lesson taught is not so much to “help them help themselves” as it is to"help them help themselves to the wallets of taxpayers.”

Unfortunately, Palin and Giuliani did not make this critique and, given their records and interests, this is not suprising. Instead of holding up the alternative of mutual aid and self-help, they offered no solution other than to defend the power of politicians like themselves who also spend their lives extracting money from defenseless taxpayers.