Gov’t Shutdown? What Gov’t Shutdown?

I guess I don’t see what all the fuss about the closure of some functions of the Federal government and their furloughed workers.  I heard on the radio tonight that some local businesses are helping out furloughed workers only.  Not the homeless, not the unemployed, no; no, only federal furloughed workers.  So the local NBA team and a few food chains will be discounting their bill.  They do the same thing with military veterans.  Why should veterans receive discounts and the rest of the productive private citizens have to pay full retail price?  The reason given by the radio announcer was because the federal workers won’t be getting a paycheck during their furloughed period.  But they will get paid once they go back to work.  In fact, it may even be more for their funds are held in an interest bearing account.  They will be compensated.  The U.S. taxpayer isn’t saving money by the shutdown.  Many of the departments still operation are doing so because funding has already been secured in the form of your taxes.  Becky Akers has a few choice words.  

Thanks to Steve Bartin.

Vox.com provides a partial list of federal government closures.

It’s officially day 24 of the longest government shutdown ever — and its effects are becoming increasingly apparent.

The December 21 deadline for funding a portion of the government, including the State Department, the Justice Department, the Transportation Department, the Agriculture Department, and the Department of the Interior, has long come and gone — and lawmakers are still trying to figure out some kind of deal. (Other agencies have already been fully funded, including the Department of Health and Human Services.)

As things stand, Congress still needs to pass seven spending bills, including the contentious Homeland Security appropriations bill, which governs funding for border security and a potential wall.

Because many agencies have already been funded, only about a quarter of the government is affected, unlike previous wholesale shutdowns in January 2018 and October 2013. Still, hundreds of thousands of employees have been furloughed and will likely receive back pay after the fact. Some services have already come to a halt, and even more are due to be cut back.

Here’s a rundown of some of the things that will and won’t be impacted by the partial shutdown.

WHAT’S STILL RUNNING
Since roughly three-quarters of the government has been funded by existing bills, many services are set to remain intact. Other programs that have been classified as “essential” will keep running as well.

SOCIAL SECURITY, MEDICARE, and MEDICAID
Social Security, Medicare, and Medicaid are all slated to keep up their operations uninterrupted. All three programs fall under “mandatory spending” that the federal government has committed to — and are not affected by the annual appropriations process. (Medicaid also relies, in part, on state spending.)

New applicants for these programs might face a wait, however.

THE US POSTAL SERVICE
Post offices will remain operational and mail delivery will continue. As Rachel Wolfe has written for Vox, the USPS is funded by independent sources of revenue, including the sales of products and services — so it’s not impacted by any kind of shutdown.

VETERANS HOSPITALS & BENEFITS
The Department of Veterans Affairs has already secured its funding, so veterans hospitals will maintain their routine operations.

Veteran disability pay and GI Bill benefits are funded by their own legislation separate from the annual appropriations bills so those would stay consistent, according to Military.com.

FOOD STAMPS
People will still be able to get food stamps and subsidized lunches, at least in the short term. But it depends on how long the shutdown lasts: the US Department of Agriculture has only had limited funding to maintain them without newly approved appropriations in the past.

USDA has said that it will be able to continue funding food stamps through at least February, at this point.

THE MILITARY
Active duty members of the military are exempt from shutdown furloughs, according to a contingency plan for the Department of Homeland Security. In the past, Congress has needed to pass separate legislation to ensure that members of the military are paid in a timely fashion during shutdowns. Pay for the majority of the military has already been funded by bills earlier last year.

THE MUELLER INVESTIGATION
While special counsel Robert Mueller’s investigation into Russian election interference and the Trump campaign is under the purview of the Department of Justice, it will not be affected by any appropriations stalemate, since it has its own permanent source of funding, CNN reports.

BORDER PATROL
Border security is at the heart of the shutdown fight and much of the staffing for it is on track to remain intact even in the face of a partial shutdown involving DHS funding. US Customs and Border Protection is classified as an “essential” service, so a majority of its employees are exempt from furloughs during the shutdown — though they could encounter lags in pay.

As Bloomberg reports, “the overwhelming majority of border patrol, emergency management and immigration enforcement staff would be able to keep doing their jobs, though with their pay delayed.”

AIR TRAFFIC CONTROL & TSA
Air traffic controllers, who fall under the jurisdiction of the Federal Aviation Administration (which is under the Transportation Department umbrella) are deemed “essential,” and will keep working during a partial shutdown.

Similarly, Transportation Security Administration agents are also considered “essential” so airline travel is not expected to see disruptions on this front, according to USA Today. Some TSA workers have begun calling in sick, however, in lieu of working without paycausing potential logjams at airports across the country.

THE FEDERAL JUDICIARY
The judiciary is able to maintain operations for a short period of time after funding runs out by using money it’s gathered from various courts-related fees including “funds derived from court filings,” according to the Congressional Research Service.

In 2018, the judiciary said it had the wherewithal to keep its operations open for about three weeks, notes CRS.

The federal judiciary has the money to keep operating at its normal scale until at least Jan. 18, according to The Washington Post.

WASHINGTON, DC
The city now has more autonomy over its budget and should be able to maintain most of its services, despite ties to federal appropriations.

During the 2013 shutdown, city officials had to scramble to ensure that DC had the money it needed to remain operational, but since then Congress has approved measures to insulate the impact on the city in the event of a shutdown.

WHAT COULD BE AFFECTED BY A PARTIAL SHUTDOWN
Every agency has its own contingency plan set up in case of a shutdown, and there are a couple bodies including the IRS and National Parks that could see some pauses or breaks in service. Additionally, as MarketWatch points out, the president has the ability to determine whether any service is “essential” or not — so it’s possible he could try to shut down a key government function like air traffic control if he really wanted to make a point.

NATIONAL PARKS
National parks — which are funded as part of the Interior Department — have long been one of the most visible government entities affected by a shutdown and many will remain open.

Much like during last January’s shutdown, a number of national parks are still accessible to visitors, but they will have limited staffing and closed access to various park facilities, including restrooms. As worries about trash and conservation at many sites pile up, the National Park Service will use entrance fees to cover the costs of some services at its popular locations, The Washington Post reports.

Visitors are able to look up and check the status of different national parks at the national park index, here.

MUSEUMS
The Smithsonian had been operating its museums and the National Zoo using reserve funds from previous years, but it has announced that it will be closing them starting last week.

The IRS
A key body under the Treasury Department, the IRS has indicated that it plans to furlough a significant fraction of its workers under a contingency plan, since tax season has yet to get underway. This partial shutdown could result in delays to this year’s filing season, which was already expected to be complicated since it’s the first to include the implementation of Republicans’ new tax reforms.

The IRS will still issue tax refunds if the shutdown continues, according to OMB.

STATE DEPARTMENT SERVICES
People will still be able to obtain passports and visas, although the State Department could curtail issuing them if those services are offered in buildings run by another agency that is shut down, Bloomberg reports.

ENVIRONMENTAL & FOOD INSPECTIONS
The Environmental Protection Agency and the Food and Drug Administration could both reduce the number of inspections they are conducting on hazardous sites and various food products, respectively.

As Vox’s Julie Belluz reports, the FDA said this week that it’s missed about a few dozen food inspections out of more than 8,000 it conducts. It notes, however, that the inspections of “high-risk” food facilities, which handle things like raw meat are due to resume shortly, while inspections of “low-risk” facilities that handle items like cookies and crackers will be put on pause.

Advertisements

“socialism, . . . positively requires a totalitarian dictatorship.”

The following essay is one of the best I’ve read that meticulously works through the differences between communism and fascism.  It is a must-read for anyone wanting to know the difference between the two systems as well as the differences between the Soviet Union and Fascist Germany.  Originally published at the Mises Institute.

November 11, 2005
By George Reisman

nazismsocialism

My purpose today is to make just two main points: (1) To show why Nazi Germany was a socialist state, not a capitalist one. And (2) to show why socialism, understood as an economic system based on government ownership of the means of production, positively requires a totalitarian dictatorship.

The identification of Nazi Germany as a socialist state was one of the many great contributions of Ludwig von Mises.

When one remembers that the word “Nazi” was an abbreviation for “der Nationalsozialistische Deutsche Arbeiters Partei — in English translation: the National Socialist German Workers’ Party — Mises’s identification might not appear all that noteworthy. For what should one expect the economic system of a country ruled by a party with “socialist” in its name to be but socialism?

Nevertheless, apart from Mises and his readers, practically no one thinks of Nazi Germany as a socialist state. It is far more common to believe that it represented a form of capitalism, which is what the Communists and all other Marxists have claimed.

The basis of the claim that Nazi Germany was capitalist was the fact that most industries in Nazi Germany appeared to be left in private hands.

What Mises identified was that private ownership of the means of production existed in name only under the Nazis and that the actual substance of ownership of the means of production resided in the German government. For it was the German government and not the nominal private owners that exercised all of the substantive powers of ownership: it, not the nominal private owners, decided what was to be produced, in what quantity, by what methods, and to whom it was to be distributed, as well as what prices would be charged and what wages would be paid, and what dividends or other income the nominal private owners would be permitted to receive. The position of the alleged private owners, Mises showed, was reduced essentially to that of government pensioners.

De facto government ownership of the means of production, as Mises termed it, was logically implied by such fundamental collectivist principles embraced by the Nazis as that the common good comes before the private good and the individual exists as a means to the ends of the State. If the individual is a means to the ends of the State, so too, of course, is his property. Just as he is owned by the State, his property is also owned by the State.

But what specifically established de facto socialism in Nazi Germany was the introduction of price and wage controls in 1936. These were imposed in response to the inflation of the money supply carried out by the regime from the time of its coming to power in early 1933. The Nazi regime inflated the money supply as the means of financing the vast increase in government spending required by its programs of public works, subsidies, and rearmament. The price and wage controls were imposed in response to the rise in prices that began to result from the inflation.

The effect of the combination of inflation and price and wage controls is shortages, that is, a situation in which the quantities of goods people attempt to buy exceed the quantities available for sale.

Shortages, in turn, result in economic chaos. It’s not only that consumers who show up in stores early in the day are in a position to buy up all the stocks of goods and leave customers who arrive later, with nothing — a situation to which governments typically respond by imposing rationing. Shortages result in chaos throughout the economic system. They introduce randomness in the distribution of supplies between geographical areas, in the allocation of a factor of production among its different products, in the allocation of labor and capital among the different branches of the economic system.

Keep reading . . . keep learning.

George Reisman, Ph.D., is Pepperdine University Professor Emeritus of Economics and the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996; Kindle Edition, 2012). See his Amazon.com author’s page for additional titles by him. His website is Capitalism.net and his blog is GeorgeReismansBlog.blogspot.com

“It’s in responsibility that most people find the meaning that sustains them through life. It’s not in happiness. It’s not in impulsive pleasures.”

[1:56]  PETERSON:  Instead, the way to find meaning is to adopt the responsibility for your own well-being and to try to put your family together, and to try to serve your community, and to try to seek for eternal truths and to live them.  That’s the sort of thing that can ground you in your life enough so that you can withstand the difficulty of life. [2:15

[2:20PETERSON: It’s very helpful for people to hear that they should make themselves competent and dangerous and take their proper place in the world.

STOSSEL:  Competent and dangerous?  Why dangerous?

PETERSON: There’s nothing to you otherwise.  If you’re not a formidable force, there’s no morality in your self-control.  If you’re incapable of violence, not being violent isn’t a virtue.  People who teach martial arts know this full well.  If you learn martial arts, you learn to be dangerous.  But simultaneously you learn to control it because it’s the alternative to being weak, naïve, weak, and harmless, which is what young men are being encouraged to be. [2:54]

STOSSEL: . . . by educators and media who bash masculinity.    

. . . 

[3:10PETERSON:  Life is a very difficult process, and if you’re not prepared for it unless you have the capacity to be dangerous.  

STOSSEL:  By dangerous that implies I should be ready to threaten someone, to hurt somebody.

PETERSON:  No, you should be capable of it . . . but that doesn’t mean you should use it.  [3:26]

Here is the article that Stossel referenced by Arthur C. Brooks, “The Secret to Human Happiness Is Earned Success,” 2010.

 

Trump, Tariffs, and Economic Honor: The Trade War as a Form of Retributive Violence

by Aaron Pomerantz

President Trump’s trade war doesn’t seem to be going well. Corporations have already left the United States, and our agricultural sector is already beginning to feel economic strain. However, despite these and potentially more disastrous consequences, the president’s actions are still receiving widespread support, and the cry among his supporters remains “trust Trump!”

A clue to the origins of the trade war’s support can be seen in a recent Newsweek article where a soybean farmer who “claimed that [Trump’s] trade policies were negatively impacting [his] bottom lines” was asked “how far he’d go” in his continued support of the president’s policy, despite the personal consequences. The farmer responded, “the Scottish in me says, to the death.” This response suggests that support for the president’s trade policies may be rooted in what social psychology calls honor ideology.

Honor Ideology and the Culture of Honor
The psychological construct of honor emerged from the study of the Scots and their descendants who settled the 18th-century American frontier, the same people referenced by the soybean farmer. Initially focused on the American South, the study of honor has since expanded to see honor as a more universal phenomenon, evolving under certain conditions, namely (1) a harsh, resource-scarce environment and (2) a lack of meaningful law enforcement. In such circumstances, individuals must often ensure their own survival against threats to their resources by maintaining an “honorable” reputation.

Here, the word “honorable” takes on a different meaning than it might have in the popular mindset. In social psychology, to be known as “honorable” means to be perceived as strong, to be well-regarded by peers, and most of all, to be known as someone who it is very, very dangerous to cross. Indeed, one of the most fundamental parts of an honor culture, and its resulting ideology is what is known as the lex talionis, or “rule of retribution,” a willingness and obligation to risk life and well-being in the defense of one’s honor. This is because in an honor culture, reputation is fundamental to survival. Without an honorable reputation, you and your family may be seen as vulnerable and open to theft or assault. Thus, honor endorsers are notoriously ruthless in the defense of their reputation, being willing to respond to even minor slights with as much ferocity as they might an actual assault.

Like many cultural adaptations, honor ideology has outlived the circumstances of its origin. However, though the lawless frontier is long gone, the lex talionis remains fundamental to cultures of honor, producing a number of detrimental outcomes, including higher rates of homicide, domestic abuse, and suicide. The modern honor endorser remains as willing as ever to respond to threats via the lex talionis.

Honor and Politics
Honor’s focus on the survival of oneself and one’s family lends it a collective focus which has political consequences. When collective identities, like nationality, are perceived as beneficial to survival (e.g., having a feeling of safety or an advantage due to one’s nationality), then collective and personal identities may merge in what is called “identity fusion.” In an honor culture, this fused identity will be defended and maintained as much as the personal one. This fusion can be hard to reverse, even when part of the collective identity, e.g., the national government, becomes a threat to personal well-being or safety.

Thus, honor endorsement often predicts support for national action that follows the lex talionis. If national reputation or safety (i.e., national honor) is threatened or slighted, then the only possible response is forceful retaliation, no matter the consequences. Research has shown how honor endorsement predicts support for violent retribution in response to national threats like terrorism and illegal immigration. It is likely that the support for President Trump’s trade war, even in the face of potential economic harm, shares a similar root in the culture of honor.

Honor Ideology and the Trade War
President Trump’s rhetoric has always contained a great deal of honor-related content, as has been remarked on even before the 2016 election. Many of his campaign promises revolved around the importance of making America respected, even feared, by making us stronger. Much of the President’s rhetoric surrounding the trade war follows this pattern, such as in this meeting with governors and members of Congress. The president constantly claims we’ve been “taken advantage of” economically, and says that the only way for us to have free trade is through the enactment of tariffs. In other words, in order to have free trade, we must first appear “strong” as a nation by retributively punishing those who have “wronged” us, even though this is precisely the opposite of free trade. This is functionally the same as an honor culture’s belief that the only way to be truly safe is to “get revenge” despite any and all possible dangers.

Many of the president’s supporters also defend the trade war using the language of honor ideology. In an interview with ABC, Senator Lindsey Graham said: “the only way you’ll get China to change is to make them pay a price and our farming communities [are] on the front lines, but we’ve got to stick with it.” This is the lex talionis talking, claiming we can’t act as we might prefer until we level the playing field again via retribution. In the 18th century, that retribution might take the form of a duel. In the 21st century, however, honor seems to demand economic violence, like tariffs.

Beyond Retaliation
It is important to note that honor ideology is not a sign of lesser intelligence, lesser societal evolution, lesser morality, or indeed, any sort of inherent flaw in those who subscribe to it. Like all cultural adaptations, honor ideology evolved as an effective remedy to the circumstances of its time. Honor cultures can even have positive results, producing loyalty, hospitality, politeness, and commitment to family in many cases. However, it is important for us to recognize when some features of an adaptation should and should not be applied. Honor is rarely about making things “better.” Rather than truly fixing a situation, honor is about restoring reputation and perception in the eyes of others. It can be ruthless and single-minded and is not the sort of mindset which leads to harmonious outcomes, especially not in economics, where a mutually beneficial exchange is fundamental to trade.

More qualified people than I can remark on the specifics of why tariffs are economically unsound and why free trade is the best option. Indeed, some, like Senator Ben Sasse, have already done this, both in the public sphere and to President Trump himself. However, I do believe I can confidently state that if we allow honor ideology to dictate our economic policy, if we continue this trade war in the spirit of lex talionis, we may indeed defend our national reputation for strength, but will gain little else.

Aaron Pomerantz, M.S. is a social psychologist currently pursuing his doctorate at the University of Oklahoma. His work has been published in Political Psychology, Newsweek, and the Foundation for Economic Education, among others. His research interests include the study of honor culture, aggression, and political ideology. He is also one of the hosts of “Life, Liberty, and the Pursuit of Snarkiness,” an economics and psychology podcast.

President Trump’s Border Wall with Mexico in Historical Context

Thanks to Robert Wenzel @ TargetLiberty

“Trump’s Wall, and the Great Walls of History”

By Mark Thornton

President Donald Trump is pushing for a wall to be built to prevent immigration through the southern border of the United States. It was a signature issue of his successful campaign to become president and he has stated that he is willing to shut down the federal government in order to get what he wants. Indeed, a large majority of Americans are opposed to paying taxes in order to provide welfare and free education for foreigners, but is a wall the right solution?

As I have already pointed out, much of the desire of central Americans to come to the US is because of our own War on Drugs. That policy increases the price of illicit drugs and encourages the development of drug cartels to safeguard the transport of drugs from production countries such as Bolivia, Columbia, and Mexico into the United States. Safeguarding the drugs for the drug cartels results in them using extreme bullying and violence on the local populations along the route, including the police and governments. The only way to prevent this asylum-seeking traffic is to end the war on drugs.

Looking beyond the motivation of immigration, let us take a look at walls. Typically, they are a signature piece of civilization. Walls are the key part of “permanent” societies. Archeologists and anthropologists study the remainder of walls in order to interpret what societies were, what they did, how they lived, and what they valued. In the modern context, walls and room size are a measure of our standard of living as bigger rooms and taller walls are a sign of success and improvement whereas sleeping in the rafters in a small cabin on the American plains is a sign of relative impoverishment. Having a big corner office with big windows is a sign of accomplishment, whereas the cubicle and the open office concept is the equivalent of eating your Christmas dinner at the child’s table.

In contrast to these walls, we have historically important governmental walls that archeologists and historians also study and write about.  These walls have the exact opposite connotation. They are symbolic of isolation and decline — they are supposedly a last-ditch effort to “save” a civilization from the marauding horde of savage people. In reality, they have never worked and only contribute to the decline of various empires because of cost and the resulting isolation. This is the type of wall that President Donald Trump wants to build.

The first historic wall was the Great Wall of China. Spanning more than five thousand miles from east to west in northern China, the Great Wall is one of the most marvelous structures of early human civilization. It is often taught that the wall was built to prevent the invasion of Mongol hordes, but the actual purpose was to prevent immigration and trade and to help consolidate the Chinese Empire. Eventually, there were invasions and wars, but they were more about pent-up demand for immigration and trade then they were about territorial expansion.

The second historical wall is Hadrian’s Wall. This wall was built across northern England by the late Roman Emperor Hadrian shortly after he came to power in 117 AD. We typically learn that the wall was built by Hadrian to prevent invasion by various barbarous tribes to the north.  We do know that Hadrian built the wall because of his policy of defense and consolidation, rather than continual expansion so his wall marks a historical turning point towards the demise of Rome. There were already various rebellions in the Empire, including England and this new policy was designed for dealing with this new reality of decline.

There are various theories why the wall was built, including the prevention of invasion, but some scholars are dubious that preventing invasion was a cost-effective priority. More likely, the reason for the wall was to regulate immigration, to prevent smuggling and cattle theft, and to collect customs fees on trade. Therefore, the wall provided the Roman legion in northern England with something to do and also a means of generating government revenue to feed and fund the troops.

The third historical wall in the Berlin Wall and the Iron Curtain. At the end of World War II Germany and Berlin remained divided into zones of control by the Soviet Union, Briton, France, and the United States. The three allied zones were consolidated into West Germany and West Berlin while the Soviet zones became East Germany and East Berlin. The problem with this arrangement was that while all of Germany was devastated by WWII, West Germany would soon become one of the fastest growing economies of the world, thanks in no small part to the policies of the liberal economist Ludwig Erhard, a friend of Ludwig von Mises. He eliminated price controls, deregulated the economy and enacted effective monetary reform. Meanwhile, in East Germany, the economies of the Soviet zones quickly fell behind.

As a consequence of the diverging economic performance, Germans from the eastern zones began migrating to the western zone for jobs, opportunity, and freedom.  This migration was intolerable to the communists as the most visible sign of the failures of socialism and the successes of free market capitalism. In response, East Germany began to build the Berlin Wall and the Soviet-controlled states began constructing the Iron Curtain to prevent migration of eastern Europeans into western Europe. These barriers were fairly successful in preventing migration and many people were shot and killed trying to escape Communism for life in capitalist Europe.  Then in 1989 the German people— East and West —tore down the war and signaling the failure of communism.

I know that most people do not really care about the practicalities of a  wall, some may be wondering why the Congress doesn’t just give him the funds and so they can get on with the holidays without all the drama of a government shutdown. The proper view of government walls argues against such apathy and, more importantly, it should wake us up to the larger picture that the United States is a modern empire. We need to all think about what can be done to prevent us from making the same mistakes as China, Rome, and the Soviet Union.

The above originally appeared at Mises.org.