Lux Lucet

There is no art which one government sooner learns of another than that of draining money from the pockets of the people. – Adam Smith

One of the great privileges afforded to Christians is that we can, without fear of contradicting ourselves, advocate a free society.  Jesus said, “if the Son makes you free, you will be free indeed.”  Of course, the immediate context of his comment was freedom from sin, not political freedom.  But as surely as Christianity releases men from the wages of sin in the next life, so to it has the effect of releasing them from tyranny in this life.  It was the Protestant Reformation that gave birth to what we now call Western Civilization and, in particular, the United States. 

Since the preaching of the Gospel has largely disappeared in the churches of Europe and America, it should come as no surprise that the political freedom which resulted from that preaching is also disappearing.  We can see this everyday in countless ways, some large and obvious such as the recently passed fascist health care bill, while others, although more subtle, are nevertheless reminders that we are a people losing our freedom. 

A particular pet peeve of mine is the recent trend that has many cities installing red light and speed cameras in their jurisdictions.  This noxious idea, imported from Europe, is spreading like kudzu across our formerly free land.  When I first read about these awful things several years ago, they were thankfully confined to the benighted regions of Western Europe.  But now they’re here on our shores, guarding our safety 24/7.   

Here in Cincinnati, we get a lot of things wrong, but when it comes to red light cameras, I have to give the city props.  Back in 2008 a measure was put on the ballot that would permanently ban the use of red light cameras in Cincinnati…and it passed.  Even the mayor supported the measure.  Of course the ham handed local politicos that supported the cameras didn’t help their cause.  When trying to sell the idea,  they actually tried to convince people that the red light cameras would be a great way to reduce Cincinnati’s budget shortfall.  Good grief! Do these people know nothing about electoral politics?  Red light cameras are all about safety, not hosing people down to cover budget shortfalls most likely caused by reckless spending.  Well, if nothing else, I suppose they deserve credit for being honest.  When the next budget crisis hits, I’m sure they won’t make that mistake again.

As a bumper sticker of recent origin states, we’re now one nation under surveillance.  Red light cameras are a sure sign of the trend that governments no longer see themselves as servants of the people, but rather as their masters.    Next time you get in your car, remember that Big Brother may be watching, and he’s sending you a ticket for the privilege.

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Here’s Ron Paul’s Tuesday Dec. 15 appearance on CNBC. He discusses the current financial crisis and the role the Federal Reserve has played in bringing it about. One of the key problems with the Fed is that it, rather than the market, is entrusted with setting interest rates. Paul comments at about the 3:30 mark that in a sound economy, capital for economic growth should come through savings, but the Fed’s artificially low interest rates, which are meant as a stimulus to the economy, actually hinder it because low interest rates discourage savings and healthy capital formation.
 

Vodpod videos no longer available.

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Government is instituted, not in order to seek its own profit at the expense of its subjects and to exercise its self-will on them but in order to provide for the best interests of its subjects.

– Martin Luther

In his book Christ & Civilization , John Robbins argues that the freedom and prosperity which characterize Western civilization have their roots, not in the political philosophy of ancient Greece and Rome, not in the teachings of the Roman Catholic Church, but in the system of ideas found in the Bible.  What we call Christianity. 

One of the most significant  political ideas found in the Bible is the notion of the servant leader.  In Christian political thought, the governing authorities exist to serve the individual.  Of course because of sin, the world generally gets this exactly backward, tyrannically asserting that individuals exist to serve the polis, volk, or state.  In the words of Christ,

You know that the rulers of the Gentiles lord it over them, and those who are great exercise authority over them.

When we think of tyranny and rulers lording it over their people, it’s natural to call to mind the regimes of men such as Nero, Hitler or Stalin.  But tyranny has more subtle forms as well, one of which is central banking.  In the United States, this activity is carried out by the Federal Reserve, the central bank of the United States.  The activities of this organization affect the lives of every single person in the country, yet it arrogantly takes the position that it’s under no obligation to tell anyone what it does, instead demanding implicit faith in its wisdom to set monetary policy and manage the economy.  What is worse, there are many within the government and the financial community who agree. 

This financial tyranny, this lording it over people, is radically un-American. 

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In this CNB Squawk Box interview, Ron Paul continues to press his case for an audit of the Federal Reserve. But with the exception of Rick Santelli, he is opposed by all of the panelists.  An audit, they say, is a threat to the independence of the Federal Reserve and will hamper its ability to effectively manage the dollar and the economy.

These poor folks just don’t get it.  But Paul counters their argument and exposes its foolishness by commenting that when people talk about Fed independence, “what they’re really talking about is secrecy.  What I’m talking about is transparecy.” 

There’s nothing in Paul’s bill (now admendment) that would involve Congress in monetary policy. Paul’s aim is to enable people to see what’s being done with their money, and the Wall Street community doesn’t like it.

Boo hoo.

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Last night I watched Sean Hannity interview two women identified as protesters at the G20 (Group of Twenty) meeting in Pittsburgh.  It was a revealing interview.  Hannity took the approach that the protests were a clash between the good guy forces of capitalism, represented by the G20, and a bad guy cabal of liberalism, represented by the protesters.  The protesters viewed themselves as proud socialists combatting the immoral forces of capitalism.  Neither side understood the issues at hand.  

Hannity’s notion that the G20 represents capitalism is a joke.  According to its own website, the G20 is made up of the Finance Ministers and Central Bank Governors of, “important industrialized and developing economies.”  In other words, the G20 is an international gathering of the same Keynesian monetary cranks, including our own “Helicopter” Ben Bernanke,  who’ve done so much to bring the West to the brink of financial collapse.  The governing philosophy of this group is fascism, not capitalism.  

One of the protesters censured capitalism for putting profits ahead of people, citing as an example American health insurance companies that seek profits by denying medical services to patients.  But any resemblance between the American health care industry and capitalism is, as they say, purely coincidental.  With the doctors union, the AMA, limiting the number of medical providers, with governmental regulations and subsidies driving up costs, the health care industry is one of the most socialized, least free segments of the American economy.  In fact, the problems that we’re having with health care in this country can be traced, not to the existence of profit seeking by health care providers, but to the lack of capitalism in the industry.

Hannity also mentioned that the G20 protesters were at times violent and he asked the women if they condemned the acts of vandalism that had taken place in the Pittsburgh marches.  They didn’t.  No Christian can support them in this.  However, one of them raised an interesting question with Hannity, asking him if he condemned the acts of violence committed in Iraq, Afghanistan and Pakistan.  By this question, she apparently was referring to acts of violence committed by the US military in those countries.  Hannity replied that there was no moral equivalence between what the US military did and the actions of the protesters.  He’s right, of course.  By waging wars of aggression on behalf of the US federal government, the American military has committed acts of violence far worse than anything done by the protesters, and those who have committed these acts must bear the guilt for them.  This guilt is shared by those who, like Hannity,  provide intellectual justification for the immoral doctrine of preemptive war.

In the end, neither side understood the issues, for neither side took counsel in God’s word.  The wisdom of this world, whether conservative or liberal,  is foolishness.

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A further problem with governmental regulatory agencies is that they undermine the operation of the most effective regulatory agency of them all: the free market.  The free market rewards those who produce and punishes those who do not.  And does this far more effectively than any regulatory body from Washington.

One way government regulation short circuits the free market is by increasing the cost of doing business.  Complying with regulations is costly, and this favors large existing firms over smaller ones without the deep pockets.  For example, if a broker/dealer wants to do business in a certain state, both the firm and its agents must register with the securities agency in that state.  This imposes a significant cost on the broker/dealer both in the time spent dealing with paperwork and the money required to purchase the license.  Large, established firms can bear these costs more easily than their upstart potential rivals.  In a free market, an investor could easily leave a high priced, under performing broker or investment adviser for one that gives him better service.  But by restricting entry into the field,  government regulations create a market where there is less competition.  This shields incompetent established firms from losing business to better run but smaller competitors.     

Government regulations can lull consumers into a false sense of security, thus blunting the salutary effects of the free market.  Bernie Madoff, perhaps the most egregious rip-off artist  in history, enjoyed a good reputation with the SEC (Securities and Exchange Commission), the federal government’s regulatory body tasked with protecting the public from financial fraud.  According to reports, the SEC was warned about Madoff’s phony practices as early as 1999, but did nothing to investigate the matter, let alone put a stop to the abuse.  This is astounding.  The agency, whose job it is to protect the public from unscrupulous investment advisers, completely dropped the ball in the biggest fraud case ever.  If Madoff’s clients had trusted less in the SEC and instead had more incentive to keep in mind the notion caveat emptor, perhaps today we would have fewer outraged ex-millionaires trying to put their lives back together.  

Gordon Clark argued that man does not learn from experience, and the Madoff case is a perfect illustration of this principle.  For ironically the SEC’s failure to prevent Madoff’s crimes is being advanced by some as a reason for more federal oversight of the financial industry, and this, for the purpose of preventing fraud!  While this conclusion certainly seems absurd at first glance, it is not as unreasonable as it sounds.  For apart from a political philosophy based on Scripture, there is no logically valid reason to oppose more regulation of the securities industry.  After all, it can always be argued that the SEC failed, not because of any inherent flaw in the agency, but because it didn’t have enough authority and money to carry out its task.  Until we abandon the notion that government’s job is to prevent crime, and once again recognize the biblical principle that the magistrate’s proper function is to punish wrongdoing,  the regulatory state will continue to grow, personal freedom will continue to shrink, and we all will be the poorer for it.

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