Why Trump’s Iran Isolation Plan May Backfire

Why Trump’s Iran Isolation Plan May Backfire

07/10/2018Ron Paul

In May, President Trump pulled the United States out of the Iran nuclear deal despite Iran living up to its obligations and the deal working as planned. While the US kept in place most sanctions against Tehran, China and Russia - along with many European countries - had begun reaping the benefits of trade with an Iran eager to do business with the world.

Now, President Trump is threatening sanctions against any country that continues to do business with Iran. But will his attempt to restore the status quo before the Iran deal really work?

Even if the Europeans cave in to US demands, the world has changed a great deal since the pre-Iran deal era.

President Trump is finding that his threats and heated rhetoric do not always have the effect he wishes. As his Administration warns countries to stop buying Iranian oil by November or risk punishment by the United States, a nervous international oil market is pushing prices ever higher, threatening the economic prosperity he claims credit for. President Trump’s response has been to demand that OPEC boost its oil production by two million barrels per day to calm markets and bring prices down.

Perhaps no one told him that Iran was a founding member of OPEC?

When President Trump Tweeted last week that Saudi Arabia agreed to begin pumping additional oil to make up for the removal of Iran from the international markets, the Saudis very quickly corrected him, saying that while they could increase capacity if needed, no promise to do so had been made.

The truth is, if the rest of the world followed Trump’s demands and returned to sanctions and boycotting Iranian oil, some 2.7 million barrels per day currently supplied by Iran would be very difficult to make up elsewhere. Venezuela, which has enormous reserves but is also suffering under, among other problems, crippling US sanctions, is shrinking out of the world oil market.

Iraq has not recovered its oil production capacity since its “liberation” by the US in 2003 and the al-Qaeda and ISIS insurgencies that followed it.

Last week, Bloomberg reported that “a complete shutdown of Iranian sales could push oil prices above $120 a barrel if Saudi Arabia can’t keep up.” Would that crash the US economy? Perhaps. Is Trump willing to risk it?

President Trump’s demand last week that OPEC “reduce prices now” or US military protection of OPEC countries may not continue almost sounded desperate. But if anything, Trump’s bluntness is refreshing: if, as he suggests, the purpose of the US military – with a yearly total budget of a trillion dollars - is to protect OPEC members in exchange for “cheap oil,” how cheap is that oil?

At the end, China, Russia, and others are not only unlikely to follow Trump’s demands that Iran again be isolated: they in fact stand to benefit from Trump’s bellicosity toward Iran. One Chinese refiner has just announced that it would cancel orders of US crude and instead turn to Iran for supplies. How many others might follow and what might it mean.

Ironically, President Trump’s “get tough” approach to Iran may end up benefiting Washington’s named adversaries Russia and China — perhaps even Iran. The wisest approach is unfortunately the least likely at this point: back off from regime change, back off from war-footing, back off from sanctions. Trump may eventually find that the cost of ignoring this advice may be higher than he imagined.

Reprinted with permission.

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Apoplithorismosphobia translated into Polish

07/06/2018Mark Thornton

My paper "Apophorismosphobia" has been translated into Polish by the Mises Institute of Poland.

Here is the original.

 

 

 

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Trumping to Serfdom

07/05/2018Doug French

Ryan Murphy of SMU has confirmed what F.A. Hayek wrote decades ago. It turns out Washington D.C. has more psychopaths per capita than anyplace else in the country. Insert my shock face here.

The best chapter of the seminal “Road to Serfdom” is ‘Why the Worst get on Top,’ where Hayek wrote,

Advancement within a totalitarian group or party depends largely on a willingness to do immoral things. The principle that the end justifies the means, which in individualist ethics is regarded as the denial of all morals, in collectivist ethics becomes necessarily the supreme rule. There is literally nothing which the consistent collectivist must not be prepared to do if it serves ‘the good of the whole’, because that is to him the only criterion of what ought to be done.

The New York Times’ Maureen Dowd quotes the study,

“psychopaths are likely to be effective in the political sphere” and that “the occupations that were most disproportionately psychopathic were C.E.O., lawyer, media, salesperson, surgeon, journalist, police officer, clergyperson, chef, and civil servant.

Hayek wrote that psychopaths, er politicians, have to “weld together a closely coherent body of supporters”...appealing “to a common human weakness. It seems to be easier for people to agree on a negative programme – on the hatred of an enemy, on the envy of the better off – than on any positive task.”

Think, the media, immigrants, the FBI, and now, gulp, Canadians.

Hayek continued,

The contrast between the ‘we’ and the ‘they’ is consequently always employed by those who seek the allegiance of huge masses. The enemy may be internal, like the ‘Jew’ in Germany or the ‘kulak’ in Russia, or he may be external. In any case, this technique has the great advantage of leaving the leader greater freedom of action than would almost any positive programme.

Trump’s surrounding characters are right out of central casting, starting with Rudy Giuliani, who, as Burt Blumert wrote, “Politically, Giuliani is like the horror film monster who refuses to stay dead.” Murray Rothbard said Giuliani was his least favorite politician.

As for Trump himself, when asked about comments made of Michael Milken’s sentencing, in a speech given in 1989 at the Libertarian Party convention, Rothbard said , “The other was Donald J. Trump, of all the nerve, saying ‘You can be happy on less money than that.’ What gall, what chutzpah!"

Chutzpah indeed. But, Rothbard hadn’t seen anything yet. Dowd, writes,

We knew Trump was a skinflint and a grifter. But the New York attorney general deeply documented just how cheesy he and his children are with a suit accusing the Trump charitable foundation of illegal behavior and self-dealing. It was just what Trump always accused the Clintons of doing.

Donald’s constant fibbing and contention that news is fake was anticipated by Hayek.

And the most efficient technique to this end is to use the old words but change their meaning. Few traits of totalitarian regimes are at the same time so confusing to the superficial observer and yet so characteristic of the whole intellectual climate as this complete perversion of language.

America’s road to serfdom continues on.

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Who’s Afraid of the Trump/Putin Summit?

07/03/2018Ron Paul

President Trump’s National Security Advisor John Bolton was in Moscow last week organizing what promises to be an historic summit meeting between his boss and Russian President Vladimir Putin. Bolton, who has for years demanded that the US inflict “pain” on Russia and on Putin specifically, was tasked by Trump to change his tune. He was forced to shed some of his neoconservative skin and get involved in peacemaking. Trump surely deserves some credit for that!

As could be expected given the current political climate in the US, the neoconservatives have joined up with the anti-Trump forces on the Left -- and US client states overseas -- to vigorously oppose any movement toward peace with Russia. The mainstream media is, as also to be expected, amplifying every objection to any step away from a confrontation with Russia.

Bolton had hardly left Moscow when the media began its attacks. US allies are “nervous” over the planned summit, reported Reuters. They did not quote any US ally claiming to be nervous, but they did speculate that both the UK and Ukraine would not be happy were the US and Russia to improve relations. But why is that? The current Ukrainian government is only in power because the Obama Administration launched a coup against its democratically-elected president to put US puppets in charge. They’re right to be nervous. And the British government is also right to be worried. They swore that Russia was behind the “poisoning” of the Skripals without providing any evidence to back up their claims. Hundreds of Russian diplomats were expelled from Western countries on their word alone. And over the past couple of months, each of their claims has fallen short.

At the extreme of the reaction to Bolton’s Russia trip was the US-funded think tank, the Atlantic Council, which is stuck in a 1950s time warp. Its resident Russia “expert,” Anders Åslund, Tweeted that long-time Russia hawk Bolton had been “captured by the Kremlin” and must now be considered a Russian agent for having helped set up a meeting between Trump and Putin. Do they really prefer nuclear war?

The “experts” are usually wrong when it comes to peacemaking. They rely on having “official enemies” for their very livelihood. In 1985, national security “expert” Zbigniew Brzezinski attacked the idea of a summit between President Reagan and Soviet leader Mikhail Gorbachev. It was “demeaning” and “tactically unwise,” he said as reported at the time by the Washington Times. Such a meeting would only “elevate” Gorbachev and make him “first among equals,” he said. Thankfully, Reagan did engage Gorbachev in several summits and the rest is history. Brzezinski was wrong and peacemakers were right.

President Trump should understand that any move toward better relations with Russia has been already pre-approved by the American people. His position on Russia was well known. He campaigned very clearly on the idea that the US should end the hostility toward Russia that characterized the Obama Administration and find a way to work together. Voters knew his position and they chose him over Hillary Clinton, who was also very clear on Russia: more confrontation and more aggression.

President Trump would be wise to ignore the neocon talking heads and think tank “experts” paid by defense contractors. He should ignore the “never Trumpers” who have yet to make a coherent policy argument opposing the president. The extent of their opposition to Trump seems to be “he’s mean and rude.” Let us hope that a Trump/Putin meeting begins a move toward real reconciliation and away from the threat of nuclear war.

Reprinted with permission. 

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The Spirit of '76: Radicalism and Revolution

07/03/2018Ryan McMaken

In the final chapters of his masterful history of the American Revolution, Conceived in Liberty, Murray Rothbard takes to examining the political and social repercussions of the American Revolution's success. He notes the revolution accelerated the elimination of old feudal laws, the disestablishment of churches, and the confiscation of lands from the old Tory ruling classes. Confiscated lands were sold by state governments to "patriots." In other words, the "land redistribution" programs we so often hear about taking place during other revolutions, were not alien to the American one.

The war changed race relations in many areas as well. In 1776, Congress authorized the enlistment of blacks in military units, and some especially anti-British masters began to offer freedom to slaves that enlisted. Meanwhile, the "American navy — Continental, state, and privateer — welcomes Negro sailors from the very beginning of the conflict." Among the colonies, only South Carolina and Georgia refused to participate in this new option for blacks in the war. Indeed, so strong was the devotion to slavery among South Carolina and Georgia officials, Rothbard concluded, "they preferred defeat in the war to allowing that sort of subversive license." Not surprisingly, these new legal and social realities accelerated the abolition of slavery in many states, although total abolition crashed upon the rocks of the slave economy in the Deep South. 

There is no denying, then, that the American Revolution was very much a revolution, as Rothbard wrote in Chapter 80

Especially since the early 1950s, America has been concerned with opposing revolutions throughout the world; in the process, it has generated a historiography that denies its own revolutionary past. This neoconservative view of the American Revolution, echoing the reactionary writer in the pay of the Austrian and English governments of the early nineteenth century, Friedrich von Gentz, tries to isolate the American Revolution from all the revolutions in the western world that preceded it and followed it. The American Revolution, this view holds, was unique; it alone of all modern revolutions was not really revolutionary; instead, it was moderate, conservative, dedicated only to preserving existing institutions from British aggrandizement. Furthermore, like all else in America, it was marvelously harmonious and consensual. Unlike the wicked French and other revolutions in Europe, the American Revolution, then, did not upset or change anything. It was therefore not really a revolution at all; certainly, it was not radical.

This view, Rothbard writes "displays an extreme naiveté on the nature of revolution." The American revolution was radical, indeed, and 

It was inextricably linked both to the radical revolutions that went before and to the ones, particularly the French, that succeeded it. From the researches of Caroline Robbins and Bernard Bailyn, we have come to see the indispensable linkage of radical ideology in a straight line from the English republican revolutionaries of the seventeenth century through the commonwealth men of the late seventeenth and eighteenth centuries, to the French and to the American revolutionaries.

In spite of all of this, the mainstream continues to devalue the Revolution and its revolutionary nature. On the left, pundits claim that the war was a reactionary attempt to preserve slavery, or that it was fought to advance the views of authoritarian retrograde religious zealots. The truly revolutionary nature of the conflict — because it was radically laissez-faire — is ignored altogether. On the right, we are told to conveniently ignore all the revolutionary aspects of the war beyond the a vague opposition to taxes. Sedition and secession in 1776? That was OK. The same thing today? That's not OK. "Follow the law!" seems to be a frequent mantra of modern "patriots."   

We are fortunate, though, that this new radicalism was not guided by ideologies such as socialism, nationalism, or any sort of totalitarianism. It was instead — as we see in the thinking of the Anti-Federalists — guided by radical decentralist views, by radical suspicion of the state, by radical opposition to commercial controls, and by a radical opposition to a national military establishment. 

Although now greatly reduced, bastardized, and diluted, these revolutionary views, to a limited extent, continue to allow for a relatively robust amount of freedom in private and commercial life. How much of that freedom will be preserved a generation from now remains to be seen. 

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The Fed Helped Goldman Sachs, Morgan Stanley Cheat "Stress Test"

07/02/2018Tho Bishop

Last week the Fed released the results of its regular "stress tests" given the large banks. It outright failed the US branch of Deutsche Bank which, as Thorsten Polleit recently noted, has problems so severe they could risk the whole Eurozone.

While the rest of America's 35 largest banks were cleared by the Fed, two banks had their ability to increase stock buybacks restricted as a result of them: Goldman Sachs and Morgan Stanley. As the Wall Street Journal reported today, this outcome was the result of phone calls between the Fed and two of the most powerful banks on Wall Street. By agreeing to feeze their shareholder payouts, the banks were able to avoid their own failing grades.

As Liz Hoffman and Lalita Clozel explain: 

The arrangement—allowing the banks to keep their capital payouts level while dodging a public rebuke by the Fed—is the first of its kind in the eight years of the Fed’s annual tests and will steer billions of dollars to shareholders of both banks. Other banks in the past have been able to keep their capital payouts steady after failing the quantitative portion of the stress test. Put another way, Goldman and Morgan Stanley got the same outcome without the black eye of a formal failing grade.

It also will boost a profitability measure that helps determine how much Goldman Chief Executive Lloyd Blankfein and Morgan Stanley CEO James Gorman are paid.

While it is true that this is yet another example of Donald Trump being far kinder to Wall Street as a president than what his campaign rhetoric indicated, it worth pointing out that entire design of stress tests always had as much to do about benefiting Wall Street than it did economic stability. After all, the tests are done using the Fed's own secret measurements, keeping useful data away from consumers to make their own informed opinions. Instead, the primary goal is for the central bank to project strength in the financial sector, which benefits banks by keeping depositors content. 

Unfortunately these stress tests have little real world value, as demonstrated by the fact that the ECB cleared 3 out of Greece's 4 major banks shortly before they became insolvent. As Paul-Martin Foss wrote at the time:

 

If we now know that the ECB’s stress tests of Greek banks were absolutely worthless, why then should we trust the Federal Reserve’s stress tests any more?

We can only conclude that the stress tests have two purposes: 1.) to reassure the public that the banking system is safe and sound so that depositors will continue to deposit their money; and 2.) to punish any banks who fall afoul of the Fed for any reason by giving them a negative assessment after a stress test, thus tarnishing their reputation in the public eye. The former is probably more important than the latter, as the overall health of the banking system depends on the existence of deposits. Without money deposited in banks, banks cannot lend and make money. Thus, ensuring that depositors don’t flee the system is one of the primary aims of central banks and banking regulators.

Bank stress tests then are really nothing more than a dog and pony show, especially if the stress test models aren’t being made public so that their relevance (or lack thereof) can be ascertained. Rather than serving as any sort of benchmark or indicator of the health and strength of the banking system, they are yet another tool that the Federal Reserve uses to “manage expectations” – to manipulate people into believing that banks are safer and sounder than they actually are. The citizenry will faithfully continue to deposit their money into bank accounts, not once doing due diligence to see just how sound their banks actually are. And the whole rotten system will continue to lurch from crisis to crisis until its final collapse.

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Another 'State of Democracy' Report Ignores Real Cause of Plummeting Trust

07/02/2018James Bovard


Americans’ faith in democracy and politicians has plummeted in large part due to perennial violations of their rights by one federal alphabet agency after another, from the FBI, to the TSA, to the DEA, to the DHS, and to the IRS. Candidate Donald Trump periodically signaled that he would curb federal abuses but, as president, he has instead spurred new crackdowns on drug users, property owners, immigrants, trade, and other targets. 

The report, like many similar trumpet calls, urges increased civics education in public schools. But civics classes are an illusory solution because government has no incentive to educate people about the perils of political power. Besides, as a 1996 Washington Post survey concluded, “The more people know, the less confidence they had in government.” 

Americans are indeed losing faith in democracy but more cheerleading from the political ruling class will not reverse the trend. As long as presidents are permitted to routinely behave like dictators, citizens would be foolish to trust ballots to provide all the protection their rights and liberties need or deserve.  Americans should scoff at any democratic faith-building exercises that omit government under the law and the Constitution.

Read the full article at The Hill
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China's Currency Manipulation Harms China — Not Its Trading Partners

07/02/2018Patrick Barron

Americans are being told that China's currency manipulations are causing harm to its trading partners, America being the main victim. Nothing could be further from the truth. China's currency manipulations certainly cause harm, but to China itself!

No country can cause harm to another by adopting any economic intervention. All economic interventions cause harm only to the country that adopts them. This applies to subsidies of home industries, quotas restricting import volumes, tariffs imposed on imports, and currency manipulations.

A nation typically manipulates its currency by giving more of its own currency in exchange for the currency of other countries. Thus foreign importers can buy more goods per unit of currency exchanged. In other words, if the free market exchange rate between the dollar and the yuan is six yuan per dollar, an importer would be able to buy goods costing six yuan by tendering one dollar. If the Bank of China arbitrarily decides to boost imports, it can give eight or ten yuan for each dollar presented. Chinese goods drop in price on the American market.

Protectionists such as President Trump view this as harm, but where exactly is the harm? A Chinese good that previously cost a dollar now may be purchased for sixty or eighty cents. Our American standard of living goes up at China's expense! The extra money in Americans' pockets may be used to consume or invest more. This is a very strange definition of harm.

The real harm occurs in China. The Bank of China sets off price inflation in its own country. It may try to mitigate this inflation by raising the interest rate on its own debt in order to withdraw the extra yuan from circulation. This is known as "sterilization". It then appears as if China has achieved greater exports with no price inflation. However, China's debt rises. Eventually holders of Chinese debt will desire to draw down their yuan-denominated debt. Demand for yuan for spending purposes will increase. At that point China will be faced with a dilemma. Either it can raise the interest rate high enough to entice enough marginal holders of debt to roll over their holdings or it can print yuan. The former causes a recession and the latter causes price inflation.

There is no such thing as a free lunch or an economic intervention that causes harm to others and not one's own country.

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The Authoritarian Left Wing of the Supreme Court

06/28/2018Tho Bishop

The retirement of Justice Anthony Kennedy has cranked-up DC political hysteria to 11. When we have grown adults weeping in their offices over the retirement of a judge, it is perhaps high time to question whether any group of nine individuals should ever have so much power over the political landscape. Ryan McMaken was making this very case in the aftermath of Antonin Scalia’s passing:

We’re told by pundits and politicians from across the spectrum how indispensable, awe-inspiring, and absolutely essential the Supreme Court is. In truth, we should be looking for ways to undermine, cripple, and to generally force the Court into irrelevance....

If Americans want a government that's more likely to leave them in peace, they should ignore the pleas to elect another politician who will just appoint another donor or political ally to the court. Instead, state and local governments should seek at every turn to ignore, nullify, and generally disregard the rulings of the Court when they run counter to local law and local institutions where — quite unlike the Supreme Court — average citizens have some actual influence over the political institutions that affect their lives.

Interestingly enough, his idea of Congress stacking the courts – in order to erode the perception of the Supreme Court as a non-political actor – is even gaining traction in interesting circles.

With the stakes now seen as being so high, the Democratic Party is faced with a great deal of Monday morning quarterbacking on how they handled the post-Scalia vacancy. Most now concede their hubris got the best of them in assuming Hillary Clinton would now be president and that Gorsuch’s vote would be held by a judge to the left of Merrick Garland. Their clear strategy now is a desperate attempt to portray Mitch McConnell as a hypocrite for pushing a court nomination on an election year. This strategy will obviously fail because McConnell is a known hypocrite and politics is simply about power – not legislative norms.

When this effort proves to be futile, my guess will be that the next strategy will be confrontation. Similar to what we’ve seen this morning with protests outside of Washington Immigration Control Enforcement offices, the activist base of the Democratic Party will take to the streets while their allied pundits will make Kennedy’s replacement out to be the last stand for the civilized world. This will be the third or fourth installment of a franchise even more tired than Star Wars: a battle between the brave #resistance against an authoritarian Trump regime determined to erode the rights of all Americans who are not white, male, and straight.

This particular chapter in the “authoritarian threat” story becomes all the more amusing when we consider this past Supreme Court session. As Sean Davis of The Federalist astutely noted, three of the most significant cases on this year’s docket saw the “liberal” wing of the court vote in favor of forced participation:

NIFLA v. Becerra, a 5-4 decision, defended the right of anti-abortion pregnancy center from being legally required to provide information about abortion services, overturning a 2015 California mandate. The significance of this legislation isn’t only major for the issue of abortion, but has larger ramifications preventing government mandates in other medical prescriptions.

Janus v. AFSCME, another 5-4 decision, protected government non-union members from being obligated to pay union dues against their wishes. Obviously no institution should have that right (even government), which led to employee dollars going to help promote causes – including political campaigns – they personally objected to.

Masterpiece Cakeshop v. Colorado, the infamous gay wedding cake case, was another clear example of forced participation. While this was a legal victory for the bakers involved, the decision itself became rather narrow and philosophically hollow – focusing on the actions of the Colorado Civil Rights Commission’s and their clear hostility to the Christian faith. As such, Justices Kagan and Breyer joined the majority. This only makes the opposition of Justices Ginsberg and Sotomayor all the more alarming. (In the defense of all four members of the Court's left wing, they did vote with Justice Roberts in Carpenter v. United States - an important electronic privacy case. It should go without saying that authoritarian impulses do not lie solely with the robes from the left.) 

So, once again, what should be made clear here is that the left is not concerned about “authoritarianism”, but simply rather losing the ability to enforce their will on the public. In their defense, this response is a fair and reasonable concern – no people should be forced to live under a government explicitly hostile to their world views.

So what should a political minority do? Perhaps start by reading some Jeff Deist.  

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Civility and Property vs. Politics

06/27/2018Jeff Deist

Calls for civility in politics are nothing new, and the incident involving White House spokesman Sarah Sanders at a restaurant has yielded plenty of smoke but little heat from both phony sides of this non-debate/non-issue.

I suppose we should be happy when property rights become part of the conversation. It's healthy when our Left progressive friends develop a situational private property ethic. Of course property owners have the unfettered right to remove people or refuse service. And of course we should all be civil with those who don't share our views. The day to day interactions that make any society at least tolerable, if not healthy, comport with customs and mutual-self interest, not positive laws. 

But liberty requires property, and civility requires civil society. When politics and the state serve as the chief organizing principles in society, property rights and social cohesion necessarily suffer. Incivility is a feature, not a bug, of a highly political society. It is also a feature of an America where far too many things are decided by the federal government or its super-legislative Supreme Court.

What kind of healthy society devolves into cheering and jeering over judicial decisions, decisions swung by just a few judges voting one way or another? Should 320 million people have to worry so much about 5 or 7 Supreme Court justices?

It's hard to argue for civility in winner-takes-all political scenarios. In fact it's a recipe for hyperpartisanship, "othering," and tribalism. It's senseless to lament a loss of civility and then argue for overcoming our differences by voting harder and suing each other more.

Ludwig von Mises witnessed the collapse of the Habsburg civilization, the rise of Nazism in Austria and Germany, and two horrific European wars-- a series of events far beyond mere incivility. His answer to actual barbarity was real liberalism, distilled in its purest form to one word: property. "If history could teach us anything, it would be that private property is inextricably linked with civilization," Mises tells us in the aptly-titled Omnipotent Government.

But property is not part of the liberal program today; on the contrary, private ownership is under serious attack not only among rising "democratic socialists" like Alexandria Cortez and Bernie Sanders but also by protectionist and mercantilist forces in the Trump administration.    

In fact only libertarians believe in full ownership--i.e. full control-- of private property. This is hardly an edgy argument at this point; Murray Rothbard made it 50 years ago. But nobody in politics or media actually believes this or argues for it. In the context of real estate, full property rights would require no property taxes, no zoning, no permits or building codes, complete freedom to alienate or sell at will, and most of all full control over who enters and who is required to leave. This kind of private property is not available to cake bakers or quaint southern restaurateurs.

America slowly but surely lost her sense of robust private ownership, the soul of a free society. It happened through the tax and regulatory state, by overturning the Lochner case and jettisoning economic substantive due process, through absurd readings of the Commerce Clause, through the creation of wildly extra-constitutional administrative agencies, and through the creation of an inferior form of property called "public accommodations."

By giving up property we gave up liberalism and civil society. By insisting on political control over vast areas of human affairs we gave up civility for force.

Remember, politics is zero sum. The restaurant owners view Sarah Sanders as a threat, as someone who is going to cause them harm if her (Trump's) administration prevails. That the owners acted absurdly is not the issue, nor is the incoherent argument that Trump somehow is beyond the pale relative to past presidents. The scene at the Red Hen restaurant was the result of the owners' not-unjustified perception that the US political system vanquishes people. To avoid being vanquished they must vanquish Trump, at least in their eyes.

Ideally, when asked to leave by the proprietors of the restaurant Ms. Sanders simply should have shrugged her shoulders and left quietly. Which is apparently what she did, although reportedly she was followed and harassed at a restaurant down the street. What's unfortunate is not merely the twitter incivility that followed, or the nasty news articles clamoring about a brewing civil war, but rather our blindness in understanding where "democracy," politics, and disrespect for private property lead. 

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Supreme Court Delivers Another Blow to Public Sector Unions

06/27/2018Tho Bishop

In a 5-4 decision released this morning, the Supreme Court ruled that public sector unions do not have the right to impose fees on non-union members. This ruling overturns a previous decision in Abood v. Detroit Board of Education, and is seen as a "decisive blow" to public unions.

Gary Galles offered background on the case in a June Mises Wire article:

In Janus v. AFSCME, the key issue was the Abood precedent, giving government employee unions authority to charge workers for the costs of negotiating on their behalf, but not for unwanted union political spending, which would violate their First Amendment rights. Mark Janus argued that all union expenditures are inherently political (e.g., if government union members get higher wages or better benefits, taxpayer costs will rise), which would result in banning all coerced non-member fees by government employee unions.

Unions and left-leaning groups ignored the Constitution and went all in defending Abood as a controlling precedent, requiring continuation under stare decisis. Unfortunately, Abood does not stand up as a Constitutional precedent.

The reason is the Supreme Court’s application of three-tiers of scrutiny for Constitutional rights. For some rights, notably economic rights, as in Commerce Clause cases, it applies a “rational basis” or minimal scrutiny test, requiring only that some legitimate government interest is involved, and the law has some rational relationship to that interest, which in practice is almost a rubber stamp. For First Amendment and other rights they deem more important, “strict scrutiny” is applied, requiring a compelling government interest and a law narrowly tailored to that interest, using the least restrictive means, which is a standard far more difficult to meet.

The central precedents that Abood relied on were Commerce Clause cases, addressing government’s right to regulate labor disputes, subject to minimal scrutiny. They did not address whether mandating union agency fees violated First Amendment rights, which the Supreme Court has increasingly held, that are to be subjected to strict scrutiny. Therefore, they provide no controlling precedent for Janus. The minimal scrutiny justification of advancing “labor peace” in Abood cannot meet the strict scrutiny standard for compelled speech in Janus, and does not justify stare decisis deference.

An interesting note on this case is that the plaintiffs arguments relied heavily on the work of Sylvester Petro, an early supporter of the Mises Institute and an expert in labor law. Earlier this year Mark Pulliam of Misrule of Law wrote a great tribute to Petro's work and how he his work has grown in influence over time:

Why is Petro relatively unknown despite his prolific writing? Part of the explanation lies in academic politics; Petro was an unabashed libertarian, a proponent of Austrian School economics, and an unrelenting critic of the National Labor Relations Act (particularly as interpreted and enforced by the National Labor Relations Board). Petro believed that the ideal regulation of labor relations consisted of enforcing consensual contractual arrangements and prohibiting coercion and the use of force, in accordance with the common law. The NLRA squarely rejects this paradigm, substituting instead a regime of cartel-style “exclusive representation,” mandatory “collective bargaining,” significant impairment of employers’ contract and property rights, and legal privileges for certain union conduct.

Perhaps no area of law is so full of myths as labor law, and nobody was more committed to debunking those myths than Petro was. During Petro’s teaching career (1950-1978), such views–although popular in the business community–were decidedly out of the mainstream in legal academia. While Richard Epstein found greater acceptance for the libertarian point of view in the 1980s, along with the advent of the “law and economics” movement that validated application of free market principles to legal analysis, during the 1950s and 1960s Petro was unfashionably ahead of his time. Petro, out-of-style during the heyday of his career, was largely forgotten by an increasingly politicized professoriate after he retired. Later generations of labor law professors, at home with the premises of the NLRA, found it easier to ignore Petro than to respond to his withering critique. The current generation of progressive intellectuals ruling the academy scorns Petro as an “ideologically driven” scholar holding “radically anti-union views.”...

Petro was a pioneer in opposing the application of NLRA concepts to public-sector labor relations, and even served as counsel for the dissenting employee in Abood v. Detroit Board of Education, 431 U.S. 209 (1977), arguing the case in the U.S. Supreme Court. It is fair to say that Petro anticipated all the problems and abuses that Abood created, which the Supreme Court has been forced to confront in a series of subsequent cases. Forty-one years later, many observers predict that the Court will finally overturn Abood in the Janus case this term. Once again, Petro was ahead of his time.

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