Corporations are people too, but as Stephen Colbert says, “only people are people.” Good point, but is a corporation like a house or a car? Anyone you talk to at a corporation, like a customer service representative, is a human being. They may not be as educated as you, so they may be slow in helping you with a customer service problem. But, after all, they are people.

Corporations are people too. The customer service representative will try to help you. The government public employee will insult you, as happened to me last week in Glendale. I was calling to get an inspection to my newly installed solar voltaic system. I bought the panels myself from a supplier in California. I hired an unlicensed guy to mount them on my roof according to specifications. I hired a professional (high priced) solar company to make drawings for me. I paid those paperwork guys my entire subsidy from SRP for those drawings, about $1,200.

But I got no working solar panels because the damned City of Glendale inspection departent is very inefficient. I have been personally jerked over for more than two years, since I first bought my broken down house, and spent $450,000 renovating it. It now appraises for $100,000 with a $193,000 mortgage (flex rate can go up to 12.5%).

I am sticking with my house; we love it. It was my dream to build the inside of a house; the exterior is mostly the same. We tore out walls and rebuilt stairs and bathroom, dissolving two small bedrooms in the process to make a giant, walk-in spa area.

I don’t care if my house is appraised at only $100,000. That is good because it keeps my real estate taxes low. The Federal Reserve keeps my mortgage down, by purchasing bonds.

People need to own bonds, to save for pension funds and life insurance. Mutual of Omaha is a big owner of government bonds. It is a big corporation. Warren Buffett lives there.

Humans Organize: Ask the labor unions.

A corporation always begins as a few friends with an idea, and turns into a project to recruit specialist helpers. That is how a business begins. Then it becomes important to make a “corporate identity.” Tom+Jerry+Sylvester becomes the TJS Corporation.

What does that mean? Did a new human person get born by the joint sex of Tom+Jerry+Sylvester? Ha Ha.

The efficient purpose of corporate personhood is to allow those who hate those guys to sue them in their corporate name, instead of having to name them individually on a petition for tort relief. [Use my number, not my 10,000 individual names (shareholders)].

Once a corporation has achieved “perceived wealth” in the market, its shares of stock are almost as liquid as money itself. Warren Buffett is offering to buy BSNF with shares of his own Berkshire Hathaway. This is not a merger; it is an investment by Buffett. But he will pay for it with his own money – shares of his company. He is not a bank, but he has become a “bank of issue.”

I am not critical of someone offering a form of barter, even a form of financial barter. It is very good that our legal and social system permits the enforcement of long term contracts, like debts and investments. So cheers to Warren Buffet for initiating one more step toward true free asset banking.

Free Asset Banking

The simple idea that you should be able to spend your money anywhere or any time when a seller is satisfying your requests. You should be able to offer any price and he should be able to decline a too low offer. But then you negotiate, like equals.

I can save my money any way I want to do. Most people cannot save because they are undisciplined, but those who can save or who have won the lottery, or who chose their parents well, can think about managing savings and even checkbook money.

It is easy today to open an account at a discount brokerage, like Scottrade, and put a few thousand in an account. Why should you put your money there instead of in Wells Fargo?

The banks want you as a customer because, on the average, most of you leave a surplus of your money in your bank accounts. You know you always want your bank account to be big enough for next week. But the banks invest your money while you are paying no attention to it. This is actually a good thing, because they know better how to invest your money. They will just keep it safe for you.

Corporations are People Too

The choice is between letting the investment departments of the big banks choose how to invest your money? Or perhaps look at some ways to invest it yourself, very safely, in some direct commodity or bond purchases.

People will be helping you. You can see in someone’s face whether they are honest. Trust your feelings.

The financial corporation you choose will open an account for you and accept a deposit. With a bank, you deposit and they say ‘Thank You.’ You spend it from their Visa or MasterCard. Good system.

Another tactic is to cut out the middleman. If you have some money to save, you should also think about directly investing it. A brokerage account at a company like Scottrade would do you well. I “bank” at Scottrade; my Visa card and checkbook spend from that account. It is money. I like to invest in gold exchange traded funds. Just like money, but in gold.

I have no “set up” like other libertarian writers. I am an advocate of free competion in currencies, and this is an example of how the full freedom of money and banking will be emerging.

Corporations are people too for (1) the convenience of plaintiffs; and (2) because customer service representatives are the face of a corporation, and senior executives are the generals and admirals of the business. We understand the value of generals and admirals. Sometimes they make mistakes. Then they lose money and go broke.

Corporations are people organized to follow a business plan. It has an organization chart, like Captains and Seargents in the army. And it gets the job done. Customers are happy – they come back repeatedly.

Customers come back to their service corporations when they have problems or questions and get some satisfaction. So, why do we criticize “corporations”?

Corporations are made up from all the people who are working as a team to satisfy customers. It is systematic. It is like rowing a skiff down a river race. All pull together.

But in reality those are people who are choosing to work as a team, inder the direction of their generals and admirals.

I am adding my little help [Here] to promote Santorum’s “Google problem.”

Democracy is the worst form of government except for all the others that have been tried. – Winston Churchill

For tyranny is a kind of monarchy which has in view the interest of the monarch only; oligarchy has in view the interest of the wealthy; democracy, of the needy: none of them the common good of all.

Tyranny, as I was saying, is monarchy exercising the rule of a master over the political society; oligarchy is when men of property have the government in their hands; democracy, the opposite, when the indigent, and not the men of property, are the rulers. – Aristotle, Politics

Democracy and Debt

The U.S. debt-limit “crisis” is dominating the news on television and in the print media. The problem is that democratically elected governments will vote for spending programs and then will resist tax increases to finance them. Governments sell bonds to get the extra funds. Then the savings of millions of people are absorbed in “safe” government bonds. How much economic progress in the world economy is retarded by the ability of governments to borrow money, which is then not available to use for productive private investment?

To be sure, some government investments are productive, like building highways, sewers and hydroelectric dams – but the question is always what cost-benefit calculations are made, and what artificially low rates of discount are used? Any cost-benefit analysis will show a net present value benefit if you do the math to get a desired result. Government funded projects that are “estimated” to be profitable are often based on false math, just as the benefits of new aircraft carriers for the navy are based on very subjective theories about the future “need” for them.

Democratic government is a collective system of decisions. Nobel laureate Kenneth Arrow of Stanford University proved that democratic systems of voting cannot make coherent selections of priority in choosing among alternatives. For example, a democratic voting process can choose Option A in preference to Option B, and Option B in preference to Option C, but then choose Option C in preference to Option A. [A>B>C>A] That would be considered dysfunctional in a single family or business, since it does not confront economic reality.

So the U.S. Congress, and in Greece, Portugal, Italy and almost everywhere else, governments choose to run deficit budgets and borrow money from the investors who have a surplus, and who believe governments will never default. Greece and Portugal are today testing that theory, and the United States government is making investors hold their breath.

The Moral Argument against Debt

Maybe if one of the big governments, like the United States, simply defaulted it would change the “faith” in sovereign debt. Maybe as Thomas Jefferson believed, the system of government borrowing is actually immoral. He wrote that for a current legislature to borrow money, which would be repaid by yet unborn taxpayers, the current generation is committing the worst form of taxation without representation. The Tea Party spokesmen are talking about government debt and saying much the same thing about grandchildren. Maybe repudiating it would be a moral thing to do, in spite of good arguments about respecting contracts and property rights.

The U.S. House of Representatives is proposing a Balanced Budget Amendment as part of any debt-limit increase bill. The main argument against this idea is

(1) it would be about as effective as the 9th Amendment, which is wonderful but toothless;
(2) it is ephemeral, since it would have to be ratified by 38 State legislatures, all dependent on Federal money; and
(3) it would almost certainly end up justifying tax increases under a democratic system that seems to prefer welfare spending.

As much as I hate taxation, maybe the best system would be a constitutional mandate requiring every bill for government spending to be coupled with a specific excise tax. The current fiscal system generalizes tax collections assessed on wealth or income or sales price or property value assessments.

Generalized taxes are a big pot of money, commonly just forecast or estimated by “experts” on the basis of econometric models of future revenues. Those are all statistical guesswork, and they are frequently wrong. A brief examination of the accuracy of government revenue forecasting over the past 50 years provides no confidence in this magic art. What I want to suggest would be some very specific excise taxes, or even a capitation on every baby’s head.

Government spending is always very specific and detailed. Pork or earmarked spending would not be popular if it were not specific. Government spending is written into the law and beneficiaries can even sue in court to receive their payments. Thus, government deficit spending is built into the democratic process. Government borrowing and debt is required automatically by the incoherent system of “A > B > C > A” decision-making.

Milton Friedman pointed out the real burden of taxes on society is how much government spends, not how much revenue it collects. Spending uses up real resources and denies them to other economic activities. When a member of Congress or a State or city legislature votes for spending, they are voting at the same time for a tax collection. Somehow specific tax assessments ought to be tied visibly to the spending. When individuals go to the store and buy something, they see the cost and they evaluate the hoped-for benefits. It is a clear decision, not affected by the problem Prof. Arrow identified.

In a democratic system, the main process is deception, even self-deception. The French philosopher, Frederic Bastiat, described democratic socialism as the belief that each person can live at the expense of everyone else. For the survival of a free democratic society, or to avert eventual fiscal collapse, some way to clean up the deception is essential.

Democracy and Social Conservatism

But the problem of democracy is more serious than simply the irrationality of the fiscal system, which votes for spending but refuses to vote for taxes.

Consider the issues of individual rights, like freedom of religion or unpopular speech. If these were put to a popular vote, the social conservatives would vote against the specific examples that might be on a ballot. Socrates was put to death by a popular vote in classical Athens because he was accused to saying offensive things about religion and corrupting the youth. Many social conservatives today would vote without hesitation to ban Hustler magazine.

Even socially progressive voters want to ban what the Supreme Court has identified as First Amendment rights in political campaign financing. This should come as no surprise to students of the “progressive movement” that expanded democracy in the United States 100 years ago. One of its first achievements was the 18th Amendment and Prohibition – which were a triumph of feminism in that era.

Democratic referendum voting is the main political tactic for anti-gay activism. The gay rights movement has won its liberties primarily from court decisions, not from a vote of the people. When the Iowa Supreme Court declared marriage between gay partners to be legal, the justices were recalled by popular vote. In California, Proposition 8 by popular vote repealed private marriage vows.

In Egypt today, a new political party has been organized with surprising speed, the Nour Party, which reportedly is set to gain a majority in the upcoming elections. This is an ultraconservative Islamic party. According to a recent news report, it has been formed because the Muslim Brotherhood is seen as too moderate.

It should be no surprise that popular democracy is more likely to give political power to social conservative movements, as against individual rights or free speech – or freedom of religion. If the majority can vote for social or cultural conservatism, or for unlimited government debt, we get the result that Socrates died for.

The following quote from The American Interest blog site is highly recommended. Mead explains why the political agenda of the Global Warming or Climate Change movement has failed. Nothing politically will be done about it, except in local areas.

Gore’s failures are not just about leadership. The strategic vision he crafted for the global green movement has comprehensively failed. That is no accident; the entire green policy vision was so poorly conceived, so carelessly constructed, so unbalanced and so rife with contradictions that it could only thrive among activists and enthusiasts. Once the political power of the climate movement, aided by an indulgent and largely unquestioning press, had pushed the climate agenda into the realm of serious politics, failure was inevitable. The only question was whether the comprehensive green meltdown would occur before or after the movement achieved its core political goal of a comprehensive and binding global agreement on greenhouse gasses.

That question has now been answered; the movement failed before it got its treaty, and while the media and the establishment have still generally failed to analyze these developments and draw the consequences, the global climate movement has become the kind of embarrassment intellectuals like to ignore. Like the Club of Rome, Y2K, the Iraq Study Group and President Obama’s management of the Middle East peace process it is something polite people try not to think about. This is why Al Gore is less visible than he used to be, and his views are less eagerly sought: the polite world and its ready handmaid the press know Gore has failed but does not want to think or write about why.

The global green strategy was a comprehensive, unified and coordinated one. Green activists around the world, in some countries empowered because proportional representation gives fringe groups disproportionate political influence, would unite around the push for a single global solution to climate change. The global solution involved a treaty to be negotiated under UN auspices that would be “legally binding” and subject the emission of greenhouse gasses to strict global controls. Developing countries would receive massive transfers of official aid ($100 billion or more a year) to compensate them for the costs they would incur in meeting carbon targets; developed countries like the United States would face stricter targets still. The target for the treaty was to cap global emissions at levels believed to keep the global temperature rise this century to two degrees centigrade.

To reach this Valhalla, a political strategy was put in place; it is the strategy that the former vice president is still gamely trying to push in his Rolling Stone article. It has failed.

The idea was to develop and present a scientific case that global warming was happening, that it was caused by human activity, and that its consequences in the near future were so devastating that a binding and effective GGCT (Global Green Carbon Treaty) was the only way out.

Politically, the framers of this approach could count on the support of green movements worldwide, on diplomats and UN officials constantly looking for new missions and new budgets, on anti-capitalist or anti-growth forces who want to slow down or reverse the process of capitalist economic development reshaping the world, on Europeans and others concerned about the rapid rise of Asia and the shift of political power from west to east, and on a group of economic interests and financial market wizards who stood to make hundreds of billions if not trillions of dollars from the massive reorientation of the world economy the green program would require.

To make the case for a proposition like this, one needs to make the following argument: that the cost of inaction is unacceptably high, that the proposed measures are both feasible and effective, and that there are no easier or cheaper methods of accomplishing the goal. This is no special set of high hurdles invented for the purpose of frustrating the greens; it is the basic test that any proposal in any arena must pass.

In the global warming debate, this involves arguing first that the evidence for rapid and destructive climate change is rock solid, second that the global green agenda can be put into place and will work if it is, and third that there are no less costly, less intrusive or more workable alternative policies to the green agenda as it is now understood.

From the beginning, the movement was dogged by what proved to be a fatal flaw. That problem was and is the sheer expense, complexity and unwieldiness of the GGCT. The political goal of the global green movement is so enormously complicated, so economically expensive, so administratively difficult, so dependent on the coordination and cooperation of so many different powerful political interests with radically different agendas that its adoption was extremely unlikely.

Any serious discussion of the merits of the GGCT would be fatal because the more the world reflects on the topic the more the world’s diplomats, policy makers and opinion leaders realize just how utopian and unworkable this “strategy” really is.

The global green treaty movement to outlaw climate change is the most egregious folly to seize the world’s imagination since the Kellog-Briand Pact Kellog-Briand Pact outlawed war in the late 1920s. The idea that the nations of the earth could agree on an enforceable treaty mandating deep cuts in their output of all greenhouse gasses is absurd. A global treaty to meet Mr. Gore’s policy goals isn’t a treaty: the changes such a treaty requires are so broad and so sweeping that a GGCT is less a treaty than a constitution for global government. Worse, it is a constitution for a global welfare state with trillions of dollars ultimately sent by the taxpayers of rich countries to governments (however feckless, inept, corrupt or tyrannical) in poor ones.

For this treaty to work, China, India, Nigeria and Brazil and scores of other developing countries must in effect accept limits on their economic growth. The United States must commit through treaty to policies that cannot get simple majorities in Congress — like sending billions of dollars in climate aid to countries like Iran, North Korea, Syria and Pakistan, even as we adopt intrusive and expensive energy controls here at home.

The green plan is a plan for a global constitution because the treaty will regulate economic production in every country on earth. This is a deeply intrusive concept; China, Nigeria, Myanmar, Iran and Vietnam will have to monitor and report on every factory, every farm, every truck and car, every generator and power plant in their territory. Many states do not now have and possibly never will have the ability to do this in a transparent and effective way. Many others will cheat, either for economic advantage or for reasons of national security. Many states do not want their own citizens to have this knowledge, much less the officials of hostile foreign powers.

Moreover, there will have to be sanctions. After all, what happens if a country violates its treaty commitments? If nothing happens, the entire treaty system collapses of its own weight. But to work, enforcement will have to mean penalties greater than the advantages from cheating. Who will monitor output around the world, assess performance against commitments, levy penalties and fines — and then enforce those decisions when they are made?

There are no real answers to these questions and can be none. No institutions exist with the power and resources to play these roles; the world’s jealous nation states will not consent to create them.

The dream that the menace of global warming will cause humanity to overcome its ancient divisions and unite in a grand global coalition is sophomoric. Rising CO2 levels will not cause the world’s governments to accept and enforce international policing of the most intimate details of their economic lives. If the menace of nuclear war can’t create world government, the menace of global warming won’t do it either.

The case for the Kellog-Briand Treaty is actually much stronger than the case for the Global Green Climate Treaty. The scientific evidence that war is dangerous and becoming more murderous, more risky and less acceptable every day needs no complex calculations and no computer models to convince a skeptical public. There can be few people on earth who do not understand and fear the horrors of modern war; nothing could be more evident and obvious than the danger that future wars pose to the human race.

Compared to the GGCT, the Kellog-Briand treaty against war was a piece of cake. A Kellog-Briand Deux would be easier to write, easier to negotiate, easier to ratify and easier to monitor than the green treaty of Al Gore’s dreams. A treaty banning war involves monitoring a few easily measurable and generally visible activities. The line between what is permitted and what is prohibited is much easier to draw in the Kellog-Briand case than in the GGCT, and many fewer activities would have to be covered — meaning the negotiation process would be less cumbersome and contentious. Violations are easier to check as well. It is much easier to see that a state is mobilizing an army than it is to monitor the millions and billions of economic activities to be regulated by global warming treaty.

The global greens don’t want to talk about any of this. They don’t want anybody to reflect on the obvious truth that a GGCT will be either ludicrously weak, unratifiable in the US Senate or unenforceable. (Like the Kyoto Protocol it could well be all three.) They are building a bridge to nowhere, and attacking anybody who disagrees as a flat earther.

They want to talk about science, not history, policy and the realities of international life. The science, they say, is “settled.” (Never mind that far better researched subjects, like human nutrition, are far from settled and that we are still watching governments build and deconstruct food pyramids as the “settled” scientific consensus continues to change.) Don’t tell me my solution is stupid, say the greens — the problem is real!

Mssrs. Kellog and Briand could have said the same thing: how can you be against our treaty campaign? Don’t you understand that War Is Bad? Are you some kind of war-denialist?

Mr. Gore’s work up to and including his latest Rolling Stone essay has taken a demagogic rather than intellectual approach. His method of arguing is to trumpet the science of climate change and to make ad hominem arguments against its opponents. The science is clear, it is settled, and the opposition against it is funded by people with an economic stake in denial. I am right about the science and my opponents are a bunch of evil opportunists in it only for the money.

That is Mr. Gore’s position, and it is his entire position. He says nothing about the feasibility of the proposed GGCT or its cost effectiveness. That, presumably, we must take on faith. There is nothing to discuss about policy. It is essentially the cry of Chicken Little: “The sky is falling and we must run and tell the king.”

Thus speaketh Al Gore: the world is burning down and so you must immediately follow my plan for fixing what’s wrong. He does not discuss whether his plan is feasible; to anyone who objects to the ponderous, unwieldy Rube Goldberg style green treaty agenda, Gore simply bellows: “What’s the matter you soul-dead, hired flack of the evil oil companies, don’t you believe in Science?”

Al Gore’s logic is exactly like the genealogy of the man who boasted that his line of descent went all the way back to Julius Caesar — with only two gaps. Gore’s ironclad argument has only two gaps: he presents no evidence that the GGCT is either feasible (that it would be efficacious if put into practice and that it can in fact be put into practice in a reasonable time frame) or economical (that it is the cheapest and most effective means of reaching the goal, and that the cost of the fix is less than the cost of the problem).

This is the method of the global green movement as shaped by Al Gore: an ever-crescendoing invocation of blizzards, droughts, locusts and floods aims to stampede the populace into embracing one of the most dubious and unworkable policy prescriptions ever presented to the public eye.

As a strategy it was as stupid as the treaty itself. Many countries are not influenced much by public opinion; China’s approach to the issue has consistently focused on China’s national interest rather than on any utopian dreams of green global governance. Key actors in Copenhagen and elsewhere have looked to cash in on what they see as a neurotic western overreaction; the number and power of such actors ensures that no global treaty will ever reflect the concerns and priorities of green activists but will be warped and distorted to serve the special interests of powerful countries.

Meanwhile, excitable climate activists inevitably stretched the available scientific evidence to build public support in the west. Like Dean Acheson at the dawn of the Cold War, they were “clearer than truth” in the interests of persuading the public to back what they considered to be an ambitious but vital agenda. As evidence of the exaggerations and inaccuracies trickled into view, public confidence in the scientific case for global warming fell and the greens are still scrambling to recapture the intellectual authority they lost in 2009-2010.

The real issue here is not climate science. It is true that, as many critics attest, Gore fundamentally misstates the nature of the scientific discussion of climate change and, especially, the extremely complex questions associated with interventions in it. He overstates what is known, disregards the inherent uncertainties involved in the study of a complex system like the climate, understates the significance of the remaining gray areas, and demagogues the science to get more out of it than his case really merits. The contrast between the intellectually unscrupulous propaganda he makes (the green-friendly UK has ruled that Gore’s Oscar winning film can only be shown in schools if teachers alert students to its errors of scientific fact) and Gore’s self-presentation as a condescending, de haut en bas Great Explainer patiently enlightening the rubes so infuriates many of his opponents that they cannot help themselves. They start arguing with him about hockey sticks and CO2.

This is exactly what Mr. Gore wants; it moves the argument onto his strongest terrain. Whatever one thinks of the scientific evidence for climate change, Gore is on much stronger ground when he argues that the earth is warming than when he argues that a great green global treaty on the lines he proposes can ever be either adopted or enforced. There are a great many scientists and scientific journals who agree with Mr. Gore about climate change. Perhaps they are all frauds and mountebanks — but that is a tough case to make in the court of public opinion. Once the argument moves to science it goes into complex and tricky terrain from which the broad lay public will draw only uncertain conclusions. Gore does not win the scientific argument as decisively as he would like — but his opponents cannot deliver a political death blow there, either. The lay public perceives angry experts and dueling theories with a large but not totally convincing preponderance of evidence on Gore’s side.

There is, however, no serious evidence in either history or political studies to suggest that his approach to the problem can ever be adopted or will ever work. Like war, global warming may well be real — but that doesn’t mean a treaty can help.

The green movement’s core tactic is not to “hide the decline” or otherwise to cook the books of science. Its core tactic to cloak a comically absurd, impossibly complex and obviously impractical political program in the authority of science. Let anyone attack the cretinous and rickety construct of policies, trade-offs, offsets and bribes by which the greens plan to govern the world economy in the twenty first century, and they attack you as an anti-science bigot.

To argue with these people about science is to miss the core point. Even if the science is exactly as Mr. Gore claims, his policies are still useless. His advocacy is still a distraction. The movement he heads is still a ship of fools.

It is a waste of time to talk science with Al Gore. It is a waste of time to listen to him at all. That, apparently, is what the world at long last is beginning to understand. The policy makers and the heads of state who only two years ago were ready to follow Gore up the mountain have softly and quietly tuned him out.

These days, he can’t even get his picture on the cover of Rolling Stone.

Published June 27, 2011, by The American Interest blog site

See also “The Failure of Al Gore: Part I (June 24, 2011)” and “Part III (July 1, 2011)”

Investors have long understood that money issued by governments is not a stable measure of value. Throughout history governments have debased money, clipped coins, repudiated debts, and used inflation for public policy. The 20th century saw the triumph of paper (credit) money after World War I and even the fiction of some link to gold was eliminated in the 1970s. Today, under the Articles of Agreement to the International Monetary Fund, governments can link their currencies to commodities except gold, although none do so.

The avowed mission of most central banks, like the U.S. Federal Reserve, includes a promise to control inflation and keep the value of money stable, but the success rate is nothing to be proud of. The current debt crisis in the Euro zone is always linked to whether the European currency will survive the stress if Greece defaults. The volatility in foreign exchange markets is testimony to the unreliability of the value of government-issued money.

Yet most people never think money could be different – money comes from government, and it is a government monopoly. This book suggests an alternative, entirely private, and hopefully safe from government policy. The classical gold standard evolved as a way to give stability to the value of money. During and after the Civil War, bonds and notes were almost always written with a gold clause to spell out a particular value in terms of gold coin because the Union and Confederate governments had both resorted to printing press inflation during the war.

Henry Mark Holzer has compiled a reference book with all of the important court cases in the history of gold clauses in U.S. law, including the 1935 Supreme Court decisions that nullified gold clause contracts. The book further analyzes the current situation with gold contracts and gold clauses once again having been legalized by Congress, and he offers some important conclusions for anyone seeking to use a gold clause in notes and bonds, leases, or other contracts for future payment.

In simple terms, Holzer recommends never to write a gold contract with any reference to legal tender or government money in any form. Although Congress made the ownership and use of gold legal in the 1970s, and some recent court cases have upheld gold clauses, the power to nullify them is still in the Constitution. But Holzer points out the Supreme Court has never ruled out the right of private parties to make contracts for delivery of particular weights or volumes of commodities. His concluding chapter, “How to Use the Gold Clause Profitably,” sets out the rules as he understands them: (1) never denominate the debt in currency dollars; (2) make the debtor owe repayment in kind, either by weight or by specific form of coin, such as Krugerrand or Maple Leaf. If the debt instrument is likely to be under the jurisdiction of a U.S. court, it might be wise to avoid gold coin from the U.S. Mint. He cautions against using the price of gold to be an index of value because that indirectly brings government money into the contract.

Holzer offers this suggested language on pp.170-171:

“Debtor hereby borrows from creditor 100 ounces of gold bullion, of .999 fineness, and agrees to repay same to creditor on or before December 31, 1987 [for example]. If, for any reason, it shall become illegal or otherwise legally impossible for debtor to repay the aforesaid gold, the event causing such illegality or impossibility shall automatically convert debtor’s obligation to one requiring the repayment of an amount of silver bullion which shall be equal to what the value of gold would have been at the time of repayment, all values to be established by the Zurich fixing.”

There are additional considerations in writing a debt contract, such as rates of interest, which have been regulated under usury or consumer protection laws. Holzer discusses these in historical perspective, but generally such regulations have only affected contracts written for repayment of amounts of government money.

Holzer suggests that standardized futures contracts might serve as a form of insurance for bullion-denominated debts but does not elaborate whether those also bring government money indirectly into the debt contract. If debtors or creditors felt the need to hedge a fluctuating gold price, it should be done independently of the debt instrument itself. Certainly this is how existing bonds and notes denominated in foreign currencies are hedged, although swap contracts, which are widespread in international currency transactions, are currently in doubt due to regulations required but not yet written under the Dodd-Frank statute.

One thing is clear, both in this book and others Holzer has written in his career as a law professor and expert on monetary history, government policy is always the source of financial uncertainty and legal tender laws make things worse. Movements in gold prices that may only be due to depreciation of paper money are taxed under capital gains rules and some governments impose sales or value added taxes on gold transactions. When it suits policy makers to prohibit or regulate private markets, property rights are threatened.

The uncertainty of property rights and future regulations are the principal cause of slow economic growth because people who need to plan for the future cannot predict what is coming. Using gold as a unit of value, measured only by its weight and fineness, has traditionally been one way to stipulate a definite future reference. After all, what will “one dollar” be worth next year? One troy ounce or one gram of gold will be exactly unchanged.

In 1956, the economist Charles Tiebout provided the framework that best explains why people vote with their feet. The “consumer-voter,” as Tiebout called him, challenges government officials to “ascertain his wants for public goods and tax him accordingly.” Each jurisdiction offers its own package of public goods, along with a particular tax burden needed to pay for those goods. As a result, “the consumer-voter moves to that community whose local government best satisfies his set of preferences.” In selecting a jurisdiction, the mobile consumer-voter is, in effect, choosing a club to join based on the benefits that it offers and the dues that it charges.

America’s federal system allows, at the state level, for 50 different clubs to join. At first glance, the states seem to differ between those that bundle numerous high-quality public benefits with high taxes and those that offer packages of low benefits and low taxes. These alternatives, of course, define the basic argument between liberals and conservatives over the ideal size and scope of government. Except for Oregon, John McCain carried every one of the 17 states with the lowest tax levels in the 2008 presidential election, while Barack Obama won every one of the 17 at the top of the list except for Wyoming and Alaska.

It’s not surprising, then, that an intense debate rages over which model is more satisfactory and sustainable. What is surprising is the growing evidence that the low-benefit, low-tax alternative succeeds not only on its own terms but also according to the criteria used by defenders of high benefits and high taxes. Whatever theoretical claims are made for imposing high taxes to provide generous government benefits, the practical reality is that these public goods are, increasingly, neither public nor good: their beneficiaries are mostly the service providers themselves, and their quality is poor. For evidence, look to the two largest states in the nation, which are fine representatives of the liberal and conservative alternatives.

One out of every five Americans is either a Californian or a Texan. California became the nation’s most populous state in 1962; Texas climbed into second place in 1994. They are broadly similar: populous Sunbelt states with large metropolitan areas, diverse economies, and borders with Mexico producing comparable demographic mixes. Both are “majority-minority” states, where non-Hispanic whites make up just under half of the population and Latinos just over a third.

According to the most recent data available from the Census Bureau, for the fiscal year ending in 2006, Americans paid an average of $4,001 per person in state and local taxes. But Californians paid $4,517 per person, well above that national average, while Texans paid $3,235. It’s worth noting, by the way, that while state and local governments in both California and Texas get most of their revenue from taxes, the revenue is augmented by subsidies from the federal government and by fees charged for governmental services and facilities, such as trash collection, airports, public university tuition, and mass transit. California had total revenues of $11,160 per capita, more than every state but Alaska, Wyoming, and New York, while Texas placed a distant 44th on this scale, with revenues of all governmental entities totaling $7,558 per person.

What might interest Tiebout is that while California and Texas are comparable in terms of sheer numbers, their demographic paths are diverging. Before 1990, both states grew much faster than the rest of the country. Since then, only Texas has continued to do so. While its share of the nation’s population has steadily increased, from 6.8 percent in 1990 to 7.9 percent in 2007, California’s has barely budged, from 12 percent to 12.1 percent.

Unpacking the numbers is even more revealing—and, for California, disturbing. The biggest contrast between the two states shows up in “net internal migration,” the demographer’s term for the difference between the number of Americans who move into a state from another and the number who move out of it to another. Between April 1, 2000, and June 30, 2007, an average of 3,247 more Americans moved out of California than into it every week, according to the Census Bureau. Over the same period, Texas saw a net gain, in an average week, of 1,544 people. Aside from Louisiana and Mississippi, which lost population to other states because of Hurricane Katrina, California is the only Sunbelt state that had negative net internal migration after 2000. All the other states that lost population to internal migration were Rust Belt basket cases, including New York, Illinois, New Jersey, Michigan, and Ohio.

As Tiebout might have guessed, this outmigration has to do with taxes. Besides Mississippi, every one of the 17 states with the lowest state and local tax levels had positive net internal migration from 2000 to 2007. Except for Wyoming, Maine, and Delaware, every one of the 17 highest-tax states had negative net internal migration over the same period. Conservative researchers’ technical explanation for this phenomenon is: “Well, duh.” Or, as Arthur Laffer and Stephen Moore wrote in the Wall Street Journal earlier this year: “People, investment capital and businesses are mobile: They can leave tax-unfriendly states and move to tax-friendly states.”

Summarizing the findings of a report they wrote for the American Legislative Exchange Council, Laffer and Moore pointed out that between 1998 and 2007, the states without an individual income tax “created 89 percent more jobs and had 32 percent faster personal income growth” than the states with the highest individual income-tax rates. California’s tax and regulatory policies, the report predicts, “will continue to sap its economic vitality,” while Texas’s “pro-growth” policies will help it “maintain its superior economic performance well into the future.” The clear implication is that California should become more like Texas.

At this point, defenders of the high-benefit, high-tax paradigm push back. Remember the other half of Tiebout’s equation, they say. There’s no need for a state to be like Texas if its high taxes and extensive regulations are part of a package deal that yields more and better public goods and an attractive quality of life.

But that, it turns out, is a big “if.” It’s true that many people are less sensitive to taxes and more concerned about public goods, and these consumer-voters will congregate in places with extensive services. But it’s also true, all things being equal, that everyone would rather pay lower than higher taxes. The high-benefit, high-tax model can work, but only if the high taxes actually purchase high benefits—that is, public goods that far surpass the quality of those available to people who pay low taxes.

And here, California is decidedly lacking. The biggest factor accounting for California’s loss of population to the other 49 states, bond ratings that would embarrass Chrysler or GM, and state politics contentious and feckless enough to shame a banana republic, has to be its public sector’s diminishing willingness and capacity to fulfill its promises to taxpayers. “Twenty years ago, you could go to Texas, where they had very low taxes, and you would see the difference between there and California,” Joel Kotkin, executive editor of NewGeography.com and a presidential fellow at Chapman University in Southern California, told the Los Angeles Times this past March. “Today, you go to Texas, the roads are no worse, the public schools are not great but are better than or equal to ours, and their universities are good. The bargain between California’s government and the middle class is constantly being renegotiated to the disadvantage of the middle class.”

Similarly, the CEO of a manufacturing company in suburban Los Angeles told a Times reporter that his business suffered less from California’s high taxes than from its ineffectual services. As a result, the company pays “a fortune” to educate its employees, many of whom graduated from California public schools, “on basic things like writing and math skills.” According to a report issued earlier this year by McKinsey & Company, Texas students “are, on average, one to two years of learning ahead of California students of the same age,” though expenditures per public school student are 12 percent higher in California.

State and local government expenditures as a whole were 46.8 percent higher in California than in Texas in 2005–06—$10,070 per person compared with $6,858. And Texas not only spends its citizens’ dollars more effectively; it emphasizes priorities that are more broadly beneficial. In 2005–06, per-capita spending on transportation was 5.9 percent lower in California than in Texas, and highway expenditures in particular were 9.5 percent lower, a discovery both plausible and infuriating to any Los Angeles commuter losing the will to live while sitting in yet another freeway traffic jam. With tax revenues scarce and voters strongly opposed to surrendering more of their income, Texas officials devote a large share of their expenditures to basic services that benefit the most people. In California, by contrast, more and more spending consists of either transfer payments to government dependents (as in welfare, health, housing, and community development programs) or generous payments to government employees and contractors (reflected in administrative costs, pensions, and general expenditures). Both kinds of spending weaken California’s appeal to consumer-voters, the first because redistributive transfer payments are the least publicly beneficial type of public good, and the second because the dues paid to Club California purchase benefits that, increasingly, are enjoyed by the staff instead of the members.

Californians have the best possible reason to believe that the state’s public sector is not holding up its end of the bargain: clear evidence that it used to do a better job. Bill Watkins, executive director of the Economic Forecast Project at the University of California at Santa Barbara, has calculated that once you adjust for population growth and inflation, the state government spent 26 percent more in 2007–08 than in 1997–98. Back then, “California had teachers. Prisoners were in jail. Health care was provided for those with the least resources.” Today, Watkins asks, “Are the roads 26 percent better? Are schools 26 percent better? What is 26 percent better?”

The steady deterioration of California’s public services hasn’t gone unnoticed. Shortly after his stunning ascension to the governor’s office in 2003, Arnold Schwarzenegger established an advisory commission, the California Performance Review (CPR), to recommend ways to make governance in California smarter, cheaper, and better. The commission labored through 2004 before delivering a doorstop report with more than 1,200 recommendations for streamlining this and consolidating that, along with an assessment that implementing the full list of changes could save California $32 billion over the first five years.

And then . . . nothing, really. The 2,500-page report was “dead on arrival,” according to Bill Whalen of the Hoover Institution, “because it was too complicated for voters to rally behind and legislators didn’t want to see it enacted.” Citizen Schwarzenegger may have assumed that his personal star power and the CPR recommendations’ plodding good sense would make a politically irresistible combination. Such reckoning failed to account for the formidable ability of even the most obscure and otiose governmental body to hunker down, defend its turf, and outlast mere politicians.

The CPR, for example, recommended abolishing dozens of California’s commissions and advisory boards, either outright or by folding their activities into a simpler and more rational organizational structure. Five years later, few of these vestigial organs have been removed. The many that remain include the Commission on Aging, whose lead accomplishment for 2009 is getting the legislature to declare a Fall Prevention Week (which began on the first day of autumn, naturally); the Apprenticeship Council, “which has been in place since the 1930s,” according to the CPR, and “is no longer needed to perform regulatory and advisory responsibilities”; the Board of Barbering and Cosmetology; the Court Reporters Board; and the Hearing Aid Dispensers Bureau.

The point is not that turning a flamethrower on every item in the Museum of Governmental Anachronisms would have saved California a great deal of money. It is, rather, that abolishing these boards and commissions, whose names are talk-radio punch lines, would have been the easy calls, the obvious first steps toward giving California’s taxpayers a decent return on their surrendered dollars. Yet even the low-hanging fruit proved out of reach. The path of least resistance was to do the same old thing, not the sensible thing.

The resistance comes from the blob of interest groups, inside and outside government, that like California’s public sector just fine the way it is and see reform as a threat to their comfortable, lucrative arrangements. It turns out, for example, that all the pointless boards and commissions are bulletproof because they provide golden parachutes to politicians turned out of the state legislature by California’s strict term limits. In the middle of the state’s most recent budget crisis, State Senator Tony Strickland proposed a bill to eliminate salaries paid to members of boards and commissions who, despite holding fewer than two formal hearings or official meetings per month, had received annual compensation in excess of $100,000. The bill died in committee.

James Madison would have to revise—or possibly burn—Federalist No. 10 if he were forced to account for the new phenomenon of the government itself becoming the faction decisively shaping its own policy and conduct. (See “Madison’s Nightmare” in City Journal’s 2009 special issue, “New York’s Tomorrow.”) This faction dominates because it’s playing a much longer game than the politicians who come and go, not to mention the citizens who rarely read the enormous owner’s manual for the Rube Goldberg machine they feed with their dollars. They rarely stay outraged long enough to make a difference.

Take entitlements and public-employee pensions, which are, Watkins says, “the real source of the state’s fiscal distress.” A 2005 study by the Legislative Analyst’s Office (California’s version of the Congressional Budget Office) found that pensions for California’s government employees “surpassed the other states—often significantly—at all retirement ages.” California government workers retiring at age 55 received larger pensions than their counterparts in any other state (leaving aside the many states where retirement as early as 55 isn’t even possible). The California Foundation for Fiscal Responsibility periodically posts a list of retired city managers, state administrators, public university deans, and police chiefs who receive pensions of at least $100,000 per year. The latest report shows 5,115 lucky members in this six-figure club. The state’s annual bill for polishing their gold watches is $610 million.

Again, the most vivid part of the problem is not the most important. California would move only slightly closer to regaining fiscal health if it scraped the gilding off the pensions and health benefits of its most lucratively retired employees. But when even a flagrant example of a government’s serving its workforce better than its citizens is politically unassailable, it’s hard to be hopeful about the mundane reforms needed to change the rest of the economically debilitating public-employee retirement system. The California Performance Review suggested the sensible thing: gradually substituting defined-contribution for defined-benefit pension plans. (According to a report by the Pew Center on the States, just 20 percent of the nation’s private-sector employees are enrolled in a defined-benefit pension plan, compared with 90 percent of public-sector employees.) To no one’s shock, the state legislature has rejected all proposals to curb the state’s financial obligations to its retired and retiring employees.

If California doesn’t want to be Texas, it must find a way to be a better California. The easy thing about being Texas is that the government has a great deal of control over the part of its package deal that attracts consumer-voters—it must merely keep taxes low. California, on the other hand, must deliver on the high benefits promised in its sales pitch. It won’t be enough for its state and local governments to spend a lot of money; they have to spend it efficiently and effectively.

The optimistic assessment is that things are going to get worse in California before they get better. The pessimistic assessment is that they’re going to get worse before they get much worse. As is often the case, hanging around with the pessimists is less fun but more instructive. The current recession has driven California’s state government into what amounts to a five-month budget cycle, according to Dan Walters of the Sacramento Bee. He estimates that the budget deal tortuously wrought in July should start falling apart in October, because it was predicated on pie-in-the-sky revenue estimates and because so many of its spending cuts are being challenged, often successfully, in the courts.

The recession will eventually end and California’s finances will improve, say the optimists. Given the state’s pervasive political bias against efficient and effective public services, however, the question is whether its finances will ever get truly well. States that have grown accustomed to thinking of the engine that drives their economies as an inexhaustible resource—whether it’s Michigan and the auto industry, New York and Wall Street, or California and the vision of the sunlit good life that used to attract new residents—find it tough to compete again for what they thought would be theirs forever, and to plan budgets for lean years that turn into lean decades. Instead, they invest their hopes in a deus ex machina that will rescue them from the hard choices they dread.

For California’s governmental-industrial complex, a new liberal administration and Congress in Washington offer plausible hope for a happy Hollywood ending. Federal aid will replace the dollars that California’s taxpayers, fed up with the state’s lousy benefits and high taxes, refuse to provide. Americans will continue to vote with their feet, either by leaving California or disdaining relocation there, but their votes won’t matter, at least in the short term. Under the coming bailout, the new 49ers—Americans in the other 49 states, that is—will be extended the privilege of paying California’s taxes. At least they won’t have to put up with its public services.

William Voegeli is a contributing editor of The Claremont Review of Books and a visiting scholar at Claremont McKenna College’s Salvatori Center. His book on the American welfare state will be published by Encounter in 2010.

This article is reprinted from The City Journal, Autumn 2009. Copyright The Manhattan Institute

The following is what I think is wrong with the world. It’s a worldwide lack of IDENTITY on the part of the great majority of the earth’s population.

There are three Levels of existence -

(1) the highest Level is who or what you are.

The next lower Level is

(2) what you’re doing or what you have done.

(3) the lowest Level is what you own.

An example of Level (1) is Jesus, who changed the world based on who he was. An example of Level (2) is George Patton, one of the great generals of World War II, whose daring exploits amazed the world. As for Level (3), we have John Rockefeller who possessed fabulous wealth or today we have Bill Gates.

Most people on this earth have no identity, no “self.” As a result, they often pick an identity such as I’m a “Yankee fan” or I’m a “Texan” or I’m a “race-car driver” or I’m a “blood.” To lack an identity means you are mindless fodder in this world, and you’re open to join any group that fascinates you or that fits into your personal fantasy.

People long to have an identity – to belong to something which gives them an identity. People without an identity can be dangerous. When you have an identity you have a self – you are centered, and you can stand as a person with your own strong convictions.

I’ve always been fascinated with the Nazi phenomenon, which I fought against. When Hitler came to power, the German people adored him. They crowded the roadsides as Hitler rode by in his armored Mercedes, and they gave him the Nazi salute as they cheered their hearts out. Some women broke down in tears as their beloved Führer drove by. The German people were proud to be Nazis, and they were mesmerized when Hitler spoke in his hysterical voice.

This was the rebirth of Germany, and their new leader was a God. Hitler’s brain-washed army swore allegiance to their amazing leader as though he was a living god. Hitler could do no wrong, and once again Germany was a land of proud Germans with a new and proud identity.

Hitler’s army did their leaders’ bidding, even if it involved murder on the most colossal scale in all history. The German population, most having no identity, finally found an identity – it was to be a member of the “master race,” a proud conquering Nazi.

You look at what the Nazis did. Burning down village after village in Russia. Murdering millions of Jews, Gypsies, homosexuals, disabled people, Poles, Slavs, and you think – it required thousands of Germans to do this. How could this have happened? It happened because most of the German people (like most people) lacked an identity. They simply followed the orders of their leaders, and the leaders followed the orders of a sadistic madman.

“Why doesn’t this occur in America,” I ask. It’s because Americans have an identity. Their identity, handed down from generation to generation, is “independence and freedom.” The history of tyrants and would-be dictators in the US is that they don’t survive. Huey Long was shot dead. Joseph McCarthy was run out of the Senate. J. Edgar Hoover has become a joke.

This is why I have no use for organized religion or for nationalism. Both provide their followers with an identity – “I’m a Jew, I’m a Catholic, I’m an American, I’m a Frenchman, I’m a Crip.” But without having a personal sense of identity, who the hell are you? Do you know who you really are? If you know yourself, then you probably have an authentic identity.

If you have a real identity, you follow no one without examining their cause. If you have an identity, you are an original, you follow no other person, nor do you accept any specific philosophy or thought process out of hand. Why do men go to war, knowing that they may be killed? Because some “leader” told them that the patriotic thing to do was to take up arms and kill other men. Why do people accept the thinking and orders of some ego-driven mindless leader? It’s because “I’m a Republican, and I follow my party’s lead” or “I’m an American, and I fight for my Country right or wrong.”

We live in a world of the mindless, a world of 4 billion souls who for the most part lack an identity. The ancient Greek aphorism, “Know Thyself” was inscribed in the forecourt of the Temple of Apollo at Delphi. Know thyself – it’s something we should still live by in today’s propaganda-filled modern era.
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This essay has been quoted from Russell’s “Dow Theory Letter” of June 4, 2009. All rights reserved by the author. Russell. Mr. Russell is 85 and very wise.

Photo Enforcement is pervasive now all over Phoenix and Arizona, clearly as a revenue measure, but it is also an effective speed-reduction system. I have quickly learned where I can speed and where I must brake down to 65-55mph (Arizona DPS highway cops do post yellow diamond signs giving you half-mile and 300 ft. warnings, so you have time to hit the brakes.)

I understand and celebrate the spirit of rebellion. Why should the fucking government use new technology to extract cash from us, just to use the free roads.

Free roads?

Zero priced roads are not zero cost roads, and the gasoline excise tax pretends to cover this problem. A tax on vehicle axle weight would be more sensible, in regard to road maintenance.

I regard all of the roads as “somebody’s property,” in this case the highway department boss (government employee). He is the commissar who should be mandated to operate his transportation system at a cash profit. Yes, I say “cash profit” to take away the fuzzy “social benefits” claim.

I understand these new photo enforcement cameras as a toll collection – revenue technique. Toll booths and electronic-radio car sensors are other toll collection revenue techniques. The difference is that they give me a choice:

Taxation Methods

Among the choices of sales (consumption taxes), net income taxes (reduces savings), and direct taxes (per capita), the Henry George/D.Ricardo/Adam Smith proposal to tax land rent – and not to tax labor or capital – is the best. It is least worse among bad things.

Add to this list what I call “the Pirates of the Caribbean tax system.” Instead of the tax collector getting maybe 10% from all of the producers, he takes 100% from a decimated group. It would increase uncertainty, but fiscally the result is the same.

Cameras at intersections, to catch red-light runners; cameras along the freeway to collect speed fines; and the sneaky photo vans they move around to nab drivers at unusual locations; all of these are very annoying, but they are merely a “Pirates of the Caribbean” tax on highways.

By his own description, Geert Wilders is not a typical Dutch politician. “We are a country of consensus,” he tells me on a recent Saturday morning at his midtown Manhattan hotel. “I hate consensus. I like confrontation. I am not a consensus politician. … This is something that is really very un-Dutch.”

Yet the 45-year-old Mr. Wilders says he is the most famous politician in the Netherlands: “Everybody knows me. … There is no other politician — not even the prime minister — who is as well-known. … People hate me, or they love me. There’s nothing in between. There is no gray area.”

To his admirers, Mr. Wilders is a champion of Western values on a continent that has lost confidence in them. To his detractors, he is an anti-Islamic provocateur. Both sides have a point.

In March, Mr. Wilders released a short film called “Fitna,” a harsh treatment of Islam that begins by interspersing inflammatory Quran passages with newspaper and TV clips depicting threats and acts of violent jihad. The second half of the film, titled “The Netherlands Under the Spell of Islam,” warns that Holland’s growing Muslim population — which more than doubled between 1990 and 2004, to 944,000, some 5.8% of the populace — poses a threat to the country’s traditional liberal values. Under the heading, “The Netherlands in the future?!” it shows brutal images from Muslim countries: men being hanged for homosexuality, a beheaded woman, another woman apparently undergoing genital mutilation.

Making such a film, Mr. Wilders knew, was a dangerous act. In November 2004, Theo van Gogh was assassinated on an Amsterdam street in retaliation for directing a film called “Submission” about Islam’s treatment of women. The killer, Mohammed Bouyeri, left a letter on van Gogh’s body threatening Ayaan Hirsi Ali, the film’s writer and narrator.

Ms. Hirsi Ali, born in Somalia, had renounced Islam and been elected to the Dutch Parliament, where she was an ally of Mr. Wilders. Both belonged to the center-right People’s Party for Freedom and Democracy, known by the Dutch acronym VVD. Both took a hard line on what they saw as an overly accommodationist policy toward the Netherlands’ Muslim minority. They argued that radical imams “should be stripped of their nationality,” that their mosques should be closed, and that “we should be strong in defending the rights of women,” Mr. Wilders tells me.

This made them dissenters within the VVD. “We got into trouble every week,” Mr. Wilders recalls. “We were like children going to their parents if they did something wrong, because every week they hassled us. … We really didn’t care what anybody said. If the factional leadership said, ‘Well, you cannot go to this TV program,’ for us it was an incentive to go, not not to go. So we were a little bit of two mavericks, rebels if you like.”

Mr. Wilders finally quit the party over its support for opening negotiations to admit Turkey into the European Union. That was in September 2004. “Two months later, Theo van Gogh was killed, and the whole world changed,” says Mr. Wilders. He and Ms. Hirsi Ali both went into hiding; he still travels with bodyguards. After a VVD rival threatened to strip Ms. Hirsi Ali’s citizenship over misstatements on her 1992 asylum application, she left Parliament and took a fellowship at the American Enterprise Institute in Washington. Mr. Wilders stayed on and formed the Party for Freedom, or PVV. In 2006 it became Parliament’s fifth-largest party, with nine seats in the 150-member lower chamber.

Having his own party liberates Mr. Wilders to speak his mind. As he sees it, the West suffers from an excess of toleration for those who do not share its tradition of tolerance. “We believe that — ‘we’ means the political elite — that all cultures are equal,” he says. “I believe this is the biggest disease today facing Europe. … We should wake up and tell ourselves: You’re not a xenophobe, you’re not a racist, you’re not a crazy guy if you say, ‘My culture is better than yours.’ A culture based on Christianity, Judaism, humanism is better. Look at how we treat women, look at how we treat apostates, look at how we go with the separation of church and state. I can give you 500 examples why our culture is better.”

He acknowledges that “the majority of Muslims in Europe and America are not terrorists or violent people.” But he says “it really doesn’t matter that much, because if you don’t define your own culture as the best, dominant one, and you allow through immigration people from those countries to come in, at the end of the day you will lose your own identity and your own culture, and your society will change. And our freedom will change — all the freedoms we have will change.”

Controversial Film

The murder of van Gogh lends credence to this warning, as does the Muhammad cartoon controversy of 2005 in Denmark. As for “Fitna,” it has not occasioned a violent response, but its foes have made efforts to suppress it. A Dutch Muslim organization went to court seeking to enjoin its release on the ground that, in Mr. Wilders’s words, “it’s not in the interest of Dutch security.” The plaintiffs also charged Mr. Wilders with blasphemy and inciting hatred. Mr. Wilders thought the argument frivolous, but decided to pre-empt it: “The day before the verdict, I broadcasted ['Fitna'] … not because I was not confident in the outcome, but I thought: I’m not taking any chance, I’m doing it. And it was legal, because there was not a verdict yet.” The judge held that the national-security claim was moot and ruled in Mr. Wilders’s favor on the issues of blasphemy and incitement.

Dutch television stations had balked at broadcasting the film, and satellite companies refused to carry it even for a fee. So Mr. Wilders released it online. The British video site LiveLeak.com soon pulled the film, citing “threats to our staff of a very serious nature,” but put it back online a few days later. (“Fitna” is still available on LiveLeak, as well as on other sites such as YouTube and Google Video.)

An organization called The Netherlands Shows Its Colors filed a criminal complaint against Mr. Wilders for “inciting hatred.” In June, Dutch prosecutors declined to pursue the charge, saying in a statement: “That comments are hurtful and offensive for a large number of Muslims does not mean that they are punishable.” The group is appealing the prosecutors’ decision.

In July, a Jordanian prosecutor, acting on a complaint from a pressure group there, charged Mr. Wilders with blasphemy and other crimes. The Netherlands has no extradition treaty with Jordan, but Mr. Wilders worries — and the head of the group that filed the complaint has boasted — that the indictment could restrict his ability to travel. Mr. Wilders says he does not visit a foreign country without receiving an assurance that he will not be arrested and extradited.

“The principle is not me — it’s not about Geert Wilders,” he says. “If you look at the press and the rest of the political elite in the Netherlands, nobody cares. Nobody gives a damn. This is the worst thing, maybe. … A nondemocratic country cannot use the international or domestic legal system to silence you. … If this starts, we can get rid of all parliaments, and we should close down every newspaper, and we should shut up and all pray to Mecca five times a day.”

It is difficult to fault Mr. Wilders’s impassioned defense of free speech. And although the efforts to silence him via legal harassment have proved far from successful, he rightly points out that they could have a chilling effect, deterring others from speaking out.

Mr. Wilders’s views on Islam, though, are problematic. Since 9/11, American political leaders have struggled with the question of how to describe the ideology of the enemy without making enemies of the world’s billion or so Muslims. The various terms they have tried — “Islamic extremism,” “Islamism,” “Islamofascism” — have fallen short of both clarity and melioration. Melioration is not Mr. Wilders’s highest priority, and to him the truth couldn’t be clearer: The problem is Islam itself. “I see Islam more as an ideology than as a religion,” he explains.

Give Up That Book

His own view of Islam is a fundamentalist one: “According to the Quran, there are no moderate Muslims. It’s not Geert Wilders who’s saying that, it’s the Quran … saying that. It’s many imams in the world who decide that. It’s the people themselves who speak about it and talk about the terrible things – the genital mutilation, the honor killings. This is all not Geert Wilders, but those imams themselves who say this is the best way of Islam.”

Yet he insists that his antagonism toward Islam reflects no antipathy toward Muslims: “I make a distinction between the ideology … and the people. … There are people who call themselves Muslims and don’t subscribe to the full part of the Quran. And those people, of course, we should invest [in], we should talk to.” He says he would end Muslim immigration to the Netherlands but work to assimilate those already there.

His idea of how to do so, however, seems unlikely to win many converts: “You have to give up this stupid, fascist book” — the Quran. “This is what you have to do. You have to give up that book.”

Mr. Wilders is right to call for a vigilant defense of liberal principles. A society has a right, indeed a duty, to require that religious minorities comply with secular rules of civilized behavior. But to demand that they renounce their religious identity and holy books is itself an affront to liberal principles. [see Joe Cobb's comment below]

Mr. Taranto, a member of The Wall Street Journal’s editorial board, writes the Best of the Web Today column for OpinionJournal.com.

Let me begin by raising some questions about taxation. First, let us compare a system of pure extortion, ungoverned by any rules or laws. The mobster who extorts you says “your money or your life” and doesn’t bargain. But then why would extortionists ever give you a break? Once a system is unjust, dickering about bits and pieces of it is virtually pointless and makes little sense anyway. There is no way to deal justly with stolen goods.

Taxes

And there is that other matter, one of the triumphs of the American revolution, that has gone south big time. It is the idea of “No taxation without representation.” Arguably the revolution began because this idea was violated by the Brits. Never mind. Our current extortionists – for never forget that something like the income tax amounts to flat out extortion, a major source of revenue for organized criminals – borrow against the expected wealth of members of future generations, committing those people to pay back what the current regime borrowed. Yet, of course, those members haven’t even been born yet, or are so young that they may not vote. So these folks are being taxed with no one representing their voice in the so called democratic process.

Of course, this policy of taxing the unrepresented is widespread. Airport and hotel taxes are typical cases in point – one is taxed in the locale of the airport or hotel but of course hasn’t any voice there at all concerning the disposition of the “revenues” thus collected. Clearly this again violates the idea of no taxation without representation. Another triumph of the American revolution that’s routinely betrayed.

Feudal Rent

But of course the policy of taxation is never a just one, be the taxpayer represented or not. For taxes are nothing but a phantom rent collected by the government for permitting the citizenry to live and work within the realm. That is how taxation made sense in feudal times, where it amounted to rent paid to the owner of the realm for the privilege of living and working there. In effect, everything was owned by the monarch and one who lived in the area had to pay for that privilege. Only the monarch had rights – sometimes dubbed “the divine rights of kings” – and he or she had the authority to issue permits to the subjects who lived within the realm.

It is just this arrangement that was supposed to have been overthrown by means of the American revolution. Sovereignty was supposed to have been taken from the monarch and assigned to individual citizens in accordance with their natural rights to their lives, liberty and property. But today there is little sign of this in America, the so called leader of the free world! So it isn’t just that governments tax earnings and capital gains at their nominal value though they have effectively been made worth less over time by inflation.

The very idea of taxation is a fraud, despite such noble designations of it as “the price we pay for civilization.” Because taxation was kept in place after the regime change, from a feudal to a free society – unlike serfdom, for example, as well as in time slavery – today it is the major instrument of tyranny. All these bailouts that amount to committing members of future generations to pay for the widespread irresponsibility of present ones could not be perpetrated without this vicious instrument of coercion. Yet in the mainstream hardly any mention is made of just how inconsistent is the financial foundation of the policy of bailouts and just how predatory is the policy of taxation.

Betrayal by the Intellectuals

What is even worse is that throughout the academic community, where radical ideas are supposed to be proposed and considered, the notion that taxation is unjust, with or without representation, doesn’t even get discussed. Instead, famous academics write prominently published tracks defending taxation and the corresponding reactionary notion that all wealth really belongs to, you guessed it, the government!

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Tibor Machan holds the R. C. Hoiles Chair in Business Ethics & Free Enterprise at Chapman University’s Argyros School of B&E and is a research fellow at the Hoover Institution (Stanford University, CA). (www.Tibormachan.com)