Thursday, August 28, 2014

The Heat of the Moment

Column for week of August 25, 2014

     Periodically obsessions sweep through the population. 
Hula hoops and cabbage patch dolls were fairly harmless.  Some
obsessions are less benign.  History reminds us of Salem's
obsession with killing witches.  A mere couple of decades ago
an obsession with imaginary sex offenses at day care centers
swept the nation.  Many lives were ruined before this craze was
exposed as a fraud perpetrated by zealots.

     Most people are now familiar with the zero tolerance
craze sweeping through schools.  Zero tolerance for guns means
zero tolerance for gun like trinkets on key chains, pictures of
guns, drawings of guns, pointed fingers, sandwiches chewed into
a gun shape, and even talking about toy guns at a bus stop.

     For sometime now summer usually brings a report or two
of someone leaving an infant in a hot car to roast while the adult
gets drunk or pursues some other vitally important matter.   This
is tragic.  Perhaps the most amazing thing is that in a nation of
more than 300 million people it usually happens only a couple
of times a year.

     Far more people deliberately kill their children. 
Thousands more die from adult conduct that is irresponsible
beyond belief.  Be that as it may, kids alone in cars is the latest
obsession.  The children baked in cars are usually infants
incapable of helping themselves.  The current craze extends to
older children.  There is a difference.

     My mother left me alone in the car from time to time
while going into a store or someone's house.   It was boring but
still probably preferable to being dragged into a store, unless it
was a candy store.

     I still vividly remember one adventure alone in the car at
a neighbor's house.  My mother was in the house.  I was bored
and looking for something to do.  Part of that something turned
out to be pushing the big shiny button on the steering column.

     No, the car didn't explode or lunge into the house.  I
wasn't part of a James Bond movie.  Nothing happened.  And,
nothing continued to happen when my mother returned to the
car.  The car wouldn't start.  The ignition switch was stuck in
off.  I didn't know what I did.  Neither did mother.  Mother
called dad who came and instantly undid what I had done.

     Now I know what happened.  Unusual for its day the car
had a steering column lock.  The key cylinder had been
removed.  The button I pushed locked the steering column and
ignition switch.  All it took to unlock the switch was to put a
finger in the key cylinder hole and push.  Mother didn't know
that.  So, even long ago there were hazards in leaving kids alone
in cars.

     The hazards have grown exponentially with the latest
craze.  A mother accidentally locked her children in her car with
the keys also in the car.  While she was frantically trying to
figure out how to get the car open some helpful soul called the
cops.  The cops arrested the mother.

     Another mother got out of her car to smoke in a parking
lot.  While she was smoking the cops arrested her for leaving the
kids in the car.  I guess leaving doesn't require going very far
away.

     Sometimes tragedy strikes  A mother left her daughter in
the car while the mother went to the bank.  She is dead now, the
mother not the daughter.  The daughter is fine.  The mother was
killed in a bank robbery.  Cars aren't always the most dangerous
place for children.

     The lesson should be to use common sense. 
Unfortunately common sense isn't common enough that everyone
is able to find it.   There is reason to be concerned about
children alone in cars.  A knee jerk reaction that a child alone in
a car equals disaster is just plain wrong.  And, it can lead to
more harm than good.

aldmccallum@gmail.com
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Copyright 2014
Albert D. McCallum

Monday, August 25, 2014

How Twisted Can It Get?

Column for week of August 18, 2014

     Please buckle your seatbelt before reading this column. 
It will be a wild, twisted ride.

     The US government forces the use of ethanol in vehicle
fuel.  It also subsidizes production of ethanol.   That same
government also placed a hefty tariff on imported ethanol.  The
reason for the tariff is to protect the US producers of expensive
corn based ethanol from less expensive ethanol made from
sugarcane grown in the tropics.  Sugarcane can be grown much
more efficiently in the tropics than in the US.  That tariff also
protects drivers from lower fuel prices.

     The government also uses tariffs and quotas to block the
importing of sugar.  Government actions make sugar cost about
twice as much in the US as in the rest of the world.  This is
purely a ripoff of sugar users for the benefit of the powerful
sugar producers' lobby.  Everything so far is simply government
granting favors to powerful special interests.  In other words,
government doing what it does best.

     Imagine my surprise when I saw a headline about a
Nebraska ethanol plant giving up on corn and producing ethanol
from sugar.  How could it pay to replace corn with expensive
sugar?  Why did the government even allow its favorite
sweetener to replace its favorite grain?

     Confusing matters even more, I discovered that the
ethanol plant was buying its sugar from none other than the
government of the U.S. of A.  Why does the US government
have sugar to sell?

     Obviously I haven't laid out the complete story yet.  The
US government buys sugar to keep the price high.  That can
work.  Should sugar buyers say "Thank you?"

     Won't the government's sale of sugar defeat its purpose
for buying the sugar?  Not necessarily.  Government sells the
sugar for nonhuman consumption.  I am all but certain that most
ethanol plants are nonhuman.  Of course, the limit on the use of
the sugar makes it sell at a lower price.  Apparently that price is
so low that it makes sense, and dollars, to make ethanol from
sugar.

     The government selling food for nonhuman consumption
is nothing new.   While in grade school I read about the
government buying potatoes, dying them blue, and selling them
for nonhuman consumption.  Some things never change.

     Let us consider some of the consequences of all this
intervention in the market. The artificially high price for sugar
motivated sugar users to seek less expensive alternatives.  This
made corn syrup the preferred sweetener for soft drinks and
many other products.

     At least it is preferred by the manufacturers.  Not all
consumers are on board.  The claimed health hazards of high
fructose corn syrup do appear to be over blown.  Consider that
the sweetener in honey is identical to high fructose corn syrup. 
Unscrupulous honey sellers mix corn syrup with honey.  Also,
when the body digests sugar the first step is to break the sugar
down to the molecules that make up corn syrup.

     Now sugar is replacing corn in the manufacture of
ethanol.  Obviously that displaced corn can be used to make
corn syrup.  The corn syrup can replace the sugar displaced from
soft drinks.  Instead of cars powered by corn and people
powered by sugar, we will have cars powered by sugar and
people powered by corn.  I stand in awe of yet another miracle
worked by government.

     The net effect is the taxpayers are paying double the free
market price for their sugar.  Then they are taxed to subsidize
sugar purchases for an ethanol plant.  What a sweet deal.

     Does anyone besides politicians, bureaucrats and
lobbyists benefit from the scheme concocted by government?  I
give government too much credit.  It didn't concoct most of the
scheme.  Many of the results were the accidental byproducts of
politicians and bureaucrats fiddling with things they didn't half
understand.   In other words, It was just a normal day's work in
D.C.

aldmccallum@gmail.com
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Copyright 2014
Albert D. McCallum

Thursday, August 21, 2014

Is Money Wealth?

Column for week of August 11, 2014                               

     People with large amounts of money are commonly
called wealthy.  Does this prove that money is wealth?  Money
isn't eatable.  It doesn't make good houses.  It isn't much good
for transportation.  Money is almost useless, except for one
thing.  Money has value only if it can be exchanged for real
wealth.

     Consider a dry cleaner's claim check for a coat.  It is just
a piece of paper with words on it.  In itself it has no more value
than an empty candy wrapper.  The claim check derives it value
from the coat in represents.  Destroy the claim check and no
value is lost  The coat still exists.  There may be some confusion
about who is entitled to the coat.

     Destroy the coat and the claim check will be worthless. 
The claim check derived its value from the coat.  Likewise
money derives its value from the real wealth that can be bought
with it.  Money isn't wealth.  Creating money doesn't create
wealth.  Destroying money doesn't destroy wealth.  As with the
claim check for a coat, destruction of money may affect who is
entitled to the wealth.

     Money is sometimes considered useful for storing wealth. 
This is an illusion.  Money has value only so long as someone
will accept it in exchange for real wealth.  The value of money
is based on faith in the money being accepted in exchange for
real wealth.  Destroy that faith and the money is worthless.

     Unlike a claim check for a coat, money doesn't entitle the
holder to demand anything from anyone.  The owner can refuse
to accept money in exchange for his wealth.  In practice stable
money works like a claim check.  If one million dollars is spent
each day, each dollar will buy one millionth of what is sold.

     There are two ways to change the value of money.  One
is to change the quantity of goods being sold.  In our example if
sellers cut in half the goods offered for sale, the million dollars
will only buy half as much.  It will take two dollars to buy what
one bought before.

     If buyers cut their spending to $500,000 a day, each
dollar will buy twice as much as before.  Increasing the quantity
of goods sold or reducing the quantity of money spent will
increase the purchasing power of the dollar.

     If both are increased or decreased by the same percent, 
the purchasing power of a dollar will be unchanged.  It isn't the
amount of goods available for sale or the amount of money
available to spend  that drives prices.  The amount of money
being spent and the amount of goods being sold determines
prices.

     This explains how the Federal Reserve could create about
three trillion new dollars over the past six or so years without
causing rampant inflation.  Most of those new dollars are still on
deposit at the Federal reserve rather than being spent.  If those
dollars escape into the marketplace, look out.  Price inflation
will soar as the value of the diluted dollars shrinks.

     The only way to store wealth is to store real wealth, food,
clothing, autos, factories, machines etc.  The only real wealth is
consumer goods and things useful for producing consumer
goods.

     Money will retain its value as claim checks only so long
as someone produces real wealth that they will exchange for
money.  Using money to store value will work only so long as
the money supply doesn't grow substantially faster than the
supply of goods produced and offered for sale in exchange for
money.

     With paper money and fractional reserve banking we are
at the mercy of government and the banks as to how fast the
money supply will grow.  How comforting is it that using the
reserves already created private banks could flood the market
with about 20 trillion dollars of new credit money.  Twenty
trillion dollars is more than either the annual gross domestic
product or the national debt.

aldmccallum@gmail.com
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Copyright 2014
Albert D. McCallum

Monday, August 11, 2014

What Is Natural Law?

Column for week of August 4, 2014

     For as long as I remember I have heard that the
Declaration of Independence and Constitution are based on
natural law and inalienable rights.  I never saw a coherent
explanation of how it worked.

     What is the foundation of natural law?  The first clue is
that we should look to the nature of man to find principles on
which to build.

     An individual has only two options.  Either he is free to
control himself and make his own choices, or he is controlled by
others.  Another name for control is ownership.  The owner has
the right to control what he owns.  The flip side is, he owns
what he has the right to control.

     An individual has only two options.  Either the individual
owns himself, or is owned by others.  The options are freedom
or slavery.  In partial slavery the individual is only partially
owned by others.

     Slavery is repugnant to humans.  Still, some willingly
enslave others.  They are far less enthusiastic about being
enslaved.

     Thus, we find in the nature of individuals the first
principle of natural law.  The individual must own himself. 
Slavery violates the nature of man.  I am considering only the
relationships among humans.  I leave it to the theologians to
ponder humans' relationships with deity.

     To survive we must work and produce at least the
necessities for life.  Even living off nature requires effort to
harvest and use nature's bounty.  The second principle of natural
law flows from the first.  Individuals are entitled to own the
fruits of their labor.

     Humans bring ingenuity and labor to their tasks.  All
other resources are found in nature.  As long as those resources
lay untouched, no one owns them.  Individuals claim those
resources by possessing and improving them.

     The individual owns that with which he is the first to mix
his efforts.  The person who picks wild berries or mines
unclaimed ore owns the berries and the ore.  If he cultivates the
berries or builds a mine the individual gains ownership of the
berry patch or the mine.  They become an extension of the
individual and he owns them as part of his self.  Simply making
a claim of ownership isn't enough.  Only using and controlling
the resources creates ownership.

     Of course, owners must be free to exchange with others. 
The right to freely trade is a natural part of self ownership.

     Not all individuals respect the ownership of others.  The
third principle of natural law is the individual's right to defend
himself and the resources he has rightfully claimed.  This right
includes possession and use of tools, including weapons, which
may be useful in defending himself and his property.  Interfering
with individuals' rights to self defense violates the natural rights
of individuals.

     Free, self owning, individuals have the right to choose to
associate, or not associate, with others.  All associations must be
voluntary on the part of all parties.

     Other rights that many of us deem important flow
naturally from self ownership.  I only have space for a few
examples.

     Individuals have the right to freely communicate with all
others who are willing to listen.  Everyone also has the right to
refuse to listen.  Each may use any resources he owns or is
authorized to use by the owner.  He may build a printing press
or a platform.  No one owes him either.  No one has to
volunteer to listen.

     Also, each has the right to use his resources to practice
his religion, unless his religious practices violate the natural,
universal rights of all individuals.  No one has the right to steal
or murder, even if he claims his religion requires it.

     Reasoning from the basic principles of self ownership, we
can find answers to nearly every question about conflicts among
individuals.  Not only that, the answers are compatible with most
moral principles commonly recognized today.  We don't need
half a million pages of laws.

aldmccallum@gmail.com
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Copyright 2014
Albert D. McCallum

Thursday, August 7, 2014

Remembering the Day Joe Camel Died

Column for week of July 28, 2014            

     I noticed an article reporting on a New England
legislator's plan to ban all unskimmed milk in day care facilities. 
I passed it by as another squirrelly idea from New England.

     Then I read about a proposed law from a New England
state that would ban serving chocolate milk with student lunches. 
It was time to quarantine New England before another wave of
nanny state laws swept across the land.

     Too late.  The next article reported the virus had already
spread to the heartland.  Fargo North Dakota had adopted an
ordinance banning the serving of more than six ounces a day of
juice in day care facilities.  The nanny state is on another march.

     The rest of this column is an obituary for Joe Camel that
I first published in August 1997.  By the end it should be
apparent why I am reaching into the past.

     Joe Camel enjoyed a brief but tumultuous career in public
relations and annoyance.  Troubled by threat of execution by his
enemies, Joe chose to control his destiny by falling on his own
sword.

     Mr. Camel will no doubt be missed by his friends. 
Supposedly he did have some.  I am not among them.

     It seems only yesterday that I met Joe for the first time. 
His contorted face stared blankly at me from a billboard.  I was
sure he must be a joke --  a very bad joke.  Joe was not blessed
by his creator.  Why would anyone choose an aesthetically
challenged camel as spokesanimal for their product? 

     Perhaps it is not socially correct to speak ill of the
departed.  I will not evade reality or beat around the bush.  Joe
was one ugly camel.  That is to say quite a bit.  When is the last
time you heard anyone say, "Isn't that a beautiful camel?"

     Joe Camel was so ugly that his mother probably double
diapered him -- one to cover his face.  Perhaps it was this lack
of motherly love that pushed young Joe into the wrong crowd.

     If I had been in charge of marketing for Camels, I would
have sought ways to put Joe Camel on the Marlboro package.  I
would have seen this as the next best thing to branding
Marlboros with a giant skull and crossbones.

     Joe Camel on the Marlboro package -- that brings up an
interesting image.  Imagine the Marlboro Man coughing and
wheezing, riding a stumbling Joe Camel into the sunset.  Would
this not have been a fitting end for both careers?

     I was confident that Joe would pass from the scene far
sooner than he did.  I guess I overlooked the obvious.  Why
would anyone attracted to cigarettes be repelled by the world's
ugliest camel?

     Perhaps smoking affects more senses than taste and
smell.  Is it possible that smoking impairs vision?  Maybe it's
that "smoke gets in your eyes" thing.  Is it possible that smokers
actually saw ugly Mr. Camel as beautiful?

     The one inescapable fact is that the passing of Joe Camel
removes a spot of aesthetic blight from the American scene.  I
would have been repelled by Mr. Camel if he had been the
spokesanimal for apple pie or Gideon Bibles.

     Though I won't miss Joe, I take no pleasure in the
circumstances of his demise.  Even an ugly cartoon camel
deserves better than to be hounded to death by self righteous
bureaucrats and do gooders who insist on imposing their lifestyle
on everyone else.

     When the lifestyle vigilantes came for Joe, masses
cheered.  Will those same millions cheer when the vigilantes
come for Mayor McCheese, the Pillsbury Dough Boy, the
Budweiser frogs, and Big Boy?  The death of ugly Joe Camel
was one more nail in freedom's coffin.  How long will it be
before we all remember with regret the day Joe Camel died?

aldmccallum@gmail.com
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Copyright 1997 and 2014
Albert D. McCallum

Tuesday, July 29, 2014

Are Price Gougers Evil?

Column for week of July 21, 2014

     The label "price gouger" is often hung on those who
suddenly raise prices.  Politicians threaten price gougers.  There
is a strong myth that prices should be limited to about the cost
of production.  The person who charges more is seen as evil.

     Buyers' willingness to purchase, not cost of production,
limits prices.  All sellers can do is refuse to sell until offered
prices they want.  It matters not that it costs the producer $1,000
to make a chair.  If no one will pay more than $100, the chair
remains unsold until the producer drops the price.  I have heard
very little vilification of buyers who refuse to pay the producer's
cost of production.

     Buyers just don't care when producers lose money.  Yet,
if a producer manages to sell for $1,000 chairs that cost only
$100, the chair buyers are likely to be incensed.  If the chair
wasn't worth $1,000 to the buyer, Why did he pay $1,000?

     The mere fact that something has a price means it is in
short supply.  If there is enough for everyone the price will be
zero.  If you doubt that, try selling bags of air.

     Most things are in short supply.  If the prices fell to zero
the entire supply would be quickly claimed by someone. 
Everyone would be staring at empty shelves.  For most things
the price need not fall to zero to empty the shelves.  Suppose
that all stores cut their prices by 90 percent.  What would be left
after a few days?

     This happens with various video games and toys.  The
shelves are always empty, except briefly after new shipments.  If
sellers raised prices, demand would drop.  The item would
always be available for those willing to pay higher prices.

     There isn't such a thing as intrinsic value.  Value is
purely an opinion.  Each of us have our own opinions about
value.   These opinions vary greatly and endlessly change.

     When supply equals demand there is just enough
available for each person who wants to buy.  To achieve that
balance prices must adjust so supply will just meet the demand
of those who value the item enough to pay the price.  Higher or
lower prices will cause surpluses or shortages.

     Sellers usually seek to find prices that balance supply and
demand.  If the price is too low, buyers who don't value the item
enough to pay more still buy.  Soon even buyers who value the
item more are unable to buy because nothing is left.

     When supply suddenly decreases, or demand increases,
the price must rise to keep supply and demand in balance. 
Supply limits the number of purchases possible.  Some potential
buyers will be disappointed.  The only question is which ones?

     Consider gasoline.  If supply drops and the price doesn't
change, people who place a low value on gasoline will buy until
the supply is gone.  Then no one buys.

     If gasoline price rises from $2.00 to $10, only those who
value gasoline more than $10 a gallon will buy.  Those who
would have bought 20 gallons may now only buy three. 
Gasoline remains available for those who value it more than $10
a gallon.  Instead of the scarce gasoline being used for trips to
the video store and ball games it is available for emergencies
and driving to work.

     The so-called price gouger acts on the spot to insure that
consumption is limited to its most valuable purposes.  Long
before the government showed up with ration books and threats
to control consumption, the gasoline would be gone.

     In addition, higher prices for gasoline provide both
incentive and resources for suppliers to increase supply.  If the
price remained at $2.00, supplies would disappear and there
would be little incentive to incur higher costs to replenish them.

     Those who drastically increase prices in the face of
sudden changes in supply or demand aren't gouging anyone. 
They sell only to willing buyers.  They also provide valuable
services by allocating the product to those who value it most.

aldmccallum@gmail.com
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Copyright 2014
Albert D. McCallum

Thursday, July 17, 2014

Trust Government?

Column for week of July 14, 2014

     For nearly 20 years I have written about the scams
offered by that great fraudster we call government.  Most people
are more likely to get mad than to listen when alerted to
government scams.  I find it mildly encouraging that a recent
poll found that 75 percent don't trust government.

     The first step to undoing a fraudster is exposing him. 
Why is it so hard to convince people that government is mostly
a fraud?   It is the same reason that it is difficult to convince a
four year old that Santa Clause is a myth.  Both desperately
want to believe their Santa will deliver.

     I'm not optimistic that 75 percent really have discovered
the truth about government.  I fear that they merely don't trust
the hucksters currently running the scam.  Many probably
believe that all we need do is elect the right people and
government will forever spew out endless goodies for everyone.

     Let's briefly consider the basic reasons why government
always has been and always will be a lying fraudster.   All
people have the same desire to increase their satisfaction. 
Individuals in business and other private endeavors may have
just as much desire to rip you off as do those in government. 
They want to increase their satisfaction as much as does anyone
else.

     Free people in the private sector don't have to cooperate
with any particular individual.  We all choose to interact with
those we believe will provide us the most satisfaction.  If a free
market business wants customers, it must please those customers
more than someone else does.

     Free market businesses can't force customers to buy. 
Neither can they burn down the competition.  Government can
and does.  If government wants to cancel your insurance and
force you to buy its policy, it can and will.

     Government can also take down the competitors of
private businesses.  That is why businesses hire so many
lobbyists.  A few years ago government was promoting car
pooling and ride sharing.  Government provided car pool parking
lots still dot the landscape.

     Now cities across the land are criminalizing ride sharing.  
Why?   The cities are protecting taxicabs from competition. 
Cities are also criminalizing food trucks to protect restaurants
from competition.  The list of recipients of government
protection is all but endless.  It may be even longer than the list
of direct ripoffs by government.

     That which distinguishes government from all private
ventures is that government uses force and threats to coerce
people to do its will.  The will of those in government is always
to increase their own satisfaction.  Only government, and those
empowered by government can lawfully use force and violence
to commit aggression against others.  Only government and its
friends are free to say "Do it my way, or I will hurt you." 
Government's fatal flaw is there are too many opportunities for
exploitation.

     All government needs to do to keep its power is convince
voters that it really will deliver the goodies.  Those voters will
suspend disbelief and buy the government lies.  They will even
shout and scream at those who call attention to the government
lies.  They don't like to hear that government is like a Santa
Claus who robs banks 364 days a year to pay for one night of
giving.

     Perhaps some day a majority will accept reality and give
up their cherished belief in a benevolent and caring government. 
I am not under the illusion that the day has arrived, or is even
close.  Millions of voters still need to have their noses repeatedly
rubbed in government's endless failures before there can be a
true awakening.

     The worst lie is that government fails because the wrong
people are running it.  This lures voters to the candidates who
promise to find the right people and fix government.  There will
be no hope until voters accept that government has unfixable
inherent defects.  Drastically shrinking fraudster government is
the only solution.

aldmccallum@gmail.com
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Copyright 2014
Albert D. McCallum