Posts Tagged ‘regulations’

The Weakness of Regulation as a Means to Solve Problems

Wednesday, September 6th, 2017

Dear Friends,

It seems to me, that which is set by culture, should be changed by culture and not legislation. Today the elite have the opposite idea. They believe government legislation can right all wrongs. That is partially why we see so much regulation. Nearly every aspect of human existence is regulated by some arcane government rule. This mindset has pervaded the people, to the extent most just accept regulation as the solution to all ills, at face value. Despite decades of examples that prove regulation only makes problems worse, and examples that the culture can do miracles, people still believe the fiction. The government monopoly school system is largely to blame for this. Look at the different results of the “war on drugs,” and the anti cigarette campaigns.

In the 1950s, almost everyone smoked and very few took drugs. Rod Serling, the creator of the Twilight Zone, smoked a cigarette while introducing his show. In old episodes of Rockford Files from the 1970s people would light up a cigarette in someone’s home without even asking if it is okay. Cigarettes were far more acceptable and embedded in our culture than drugs have ever been. Yet today cigarette smoking has seen a dramatic decrease while the scourge of drugs has become an epidemic. The one, cigarettes, was controlled by culture while the other, drugs, has been controlled by regulation. In and of itself, showing at least anecdotally that regulation makes problems worse, while changing the culture can make things better.

Not all cultural changes are positive though. While the cultural elite were very nearly unanimous that cigarette use should be curtailed, they also promoted drug use and the drug culture. Drugs were depicted to be cool while cigarettes were shown to be disgusting. As the people, and especially children who are far more susceptible to propaganda, became immersed in the pro drug / anti cigarette cultures, the use of cigarettes declined rapidly, despite their being legal, while drug use expanded dramatically, eve though drugs are illegal. Knowing this it is hard to deny the cultural elite have more power to change people’s perceptions than any amount of regulation, no matter how draconian.

Any time I suggest to a progressive that regulations should be dialed way back they always come up with the excuse, what about drugs, corporate malfeasance, toxic waste dumps and the children? Then they sit back with a smug grin that they have caught me. Of course the easy answer is the cultural difference between cigarettes and drugs but one can think much deeper than that. The culture of our corporations is that of the new class and was transmitted to them by our universities. It is a toxic culture of the ends justifying the means, of class separation, and of elitism. How many times have you heard the term, “flyover country?” That epitomizes the culture of the new class, namely they believe themselves to be the smartest, wisest and most concerned people, while the rest of us hoi polloi are miscreants in dire need of being put in our place. In short, the problems they exclaim can only be solved by regulation, are created by culture, and will only be made worse by regulation.

It is attractive though, the idea that any problem can be solved by government regulation and spending. When I was in the first grade, there was a publication disseminated to the schools. In one edition there was a story how Nixon was coming to terms with democrats about spending. The article said, democrats believe that almost any problem can be solved if only you spend enough, while republicans believe spending cannot solve every problem. In my six year old first grade mind, I thought to myself, “Of course! If you spend enough any problem can be solved!” Regulation is the same, it is mentally lazy to think that any problem can be solved by regulation as well. But I ask you, can we spend enough to stop a hurricane, what about regulating racism away, is it possible to solve hunger by regulation or spending for that matter? The easy answer is yes, the correct one is a resounding, no!

So here we are, with problems galore and multiplying exponentially, seemingly all are intractable. The scourge of drugs is at an all time high despite the war on drugs, corporations are off the rails as far as corruption goes, we have political violence on our streets not seen since NAZI Germany, our politicians don’t care about Constitutional limitations or our nation’s good, immigration is impoverishing entire nations and gun crime is out of control, in the very places with the toughest laws against guns. Regulation has not solved any problem, anywhere at anytime, yet it is always the fall back position. Meanwhile we have definitive proof that changing the culture can actually solve our problems. If we truly want to solve our most intractable problems, then all we need do is look at the template of the anti cigarette campaigns, and simply change the culture. Einstein said that insanity is doing the same thing over and over and expecting a different result, by that standard our culture, government and indeed the people themselves are insane.

Sincerely,

John Pepin

Big Guy Versus the Little Guy

Thursday, April 13th, 2017

Dear Friends,

It seems to me, the role of government has always been, and continues to be, to keep the little guy down, while protecting the big guys from the little guys. The founding of the US ushered in a new paradigm but the elite, over the course of a century managed to evolve even that virtuous national ethos back to the traditional one. Today there is not a nation on the planet that allows the little people to compete on a level playing field with the big guys. With an eye to calculation, the elite use the power of propaganda to convince the little guy that they work for him, against the little guy’s interests. This is done in a myriad of ways. Usually they offer up a piece of legislation that sounds good, a hike in minimum wage for example, but actually works against the interests of the little guy. We have shown such a propensity for falling for the trick, the elite know they have nothing to fear from us, because we will fall for it over and over again.

Income taxes are the ideal example. At the beginning of Obama’s Presidency, the billionaire Warren Buffett told a crowd of drooling reporters that he was incensed, his secretary paid a higher tax rate than he did. This was reported all across the media landscape as proof Buffett is a human hearted man. So the elite in government dutifully raised his secretary’s taxes, cut Buffett’s and gave him a monopoly for his choo choo trains to carry crude oil from Canada to Texas refineries. Of course transporting oil on trains is exponentially more dangerous then in a pipeline, as Lac Magantic proves, a few dozen little people burning to death is a small price for them to pay however, for the wonderful philanthropist Buffett’s monopoly profits. The entire affair was nothing but a propaganda exercise that worked perfectly.

People who work for a living pay a much higher tax rate than people who derive their income from investments. The already rich derive their income from investments and can pay accountants to protect their income from the tax man, those of us who labor for our daily bread however, have little left to pay an accountant and tax lawyer to protect ours, so we pay through the nose. The false meme that people earning over 200k should be taxed to death, only serves to keep the rest of us down, and protects the uber wealthy from having to compete with us. This is because the guy earning over 200k is not rich yet, she is trying to get rich, and the elite cannot tolerate that, so we are plied with propaganda based on jealousy and envy. The little guy is again tricked into damaging our own interests and protecting those of the elite.

Regulations are all about keeping us down. The role of regulations, despite what the elite tell you they are, is to protect a politically favored group or industry. Let’s say someone starts a business and manages to get rich despite the array of government regulations, taxes, cronyism and corruption. The first thing he will do is turn around and close the door behind him. This is done with regulations. He will use some of his wealth to lobby government to pass regulations making his industry “more safe.” Of course more safe always means a higher bar to entry. That higher bar, one that the already rich didn’t have to leap, protects the elite from having to compete with the hungry entrepreneur. The old saying, Shirtsleeves to shirtsleeves in three generations is one of the primary motivating factors here.

The children of the uber rich never grow up. They don’t have to. So they are ill prepared to compete with people who have grown up in the school of hard knocks. That is why in a traditional capitalist economy this saying holds true. Today however the elite have put in place a whole plethora of ways to protect their half witted grandchildren. Trust funds, regulations preventing competition, taxes to keep the working woman down and cronyism that only allows certain people to do certain things. In South America they haven’t had a free market… ever. I have a friend from Guatemala Brolio. One day we were talking and I mentioned to him that land in Guatemala must be pretty cheap, and the forest products industry pays handsomely for the lumber from that part of the world. I went on to say that if him and I went in together to buy some land and used good silvicultural practices we could make a mint. He laughed and laughed at the very thought. Shocked, I asked why? He replied that only certain people in Guatemala can own land.

The next time you have to cut a check to the government for some arcane regulation you ran afoul of, to pay a tax you weren’t aware of, to get permission from the government to engage in economic activity or buy equipment that you have no use for, to satisfy some government rule, you are experiencing this in action. You are being actively held down so the elite don’t have to compete with you. Next time you get fined by some self important bureaucrat, you’re economic future is being crushed by government, to save the fortune of a half wit. This has been the role of government from time immemorial. Oh yes, there have been a few times, short periods where this wasn’t the case, and those times have been immortalized as golden ages. Ancient Greek democracy, Roman republic, the founding of the US and the early years of free enterprise also known as the Enlightenment, are the few examples. Notice however, that those periods were short, singular and most importantly, the nations and societies involved have never risen again. This is why there is and always will be a huge disparity of wealth in the world.

Sincerely,

John Pepin

Jobs, Wages and Government Intervention

Thursday, August 25th, 2016

Dear Friends,

It seems to me, take the most horrible, filthiest and degrading job that must be done, pay enough and people will climb over each other to do it for you. On the other hand, one could use the power of government to coerce someone to do it, for nothing. Clearly, the one is human hearted the other hard hearted, the first generous the second greedy, and to pay a wage befitting the job shows respect while using violence to coerce shows disrespect. I am amazed then, that those who follow the second philosophy are seen as more compassionate and humane, and those who follow the first are viewed as selfish and oppressive? Perhaps that warping of logic is a means to an end?

Since the first cave man hired another to help clean hides there has been a give and take relationship between employees and employers. Both seeking to get the most for the least. The employee wants the highest wages for the least work she can get and the employer wants the most work for the least pay. At various times both have exploited government power to force the other into a less desirable position. That strategy however depends on the political faction in power. Without government intercession the wage to labor rate would always eventually be fair. Not fair only to workers, or fair only to the bourgeois, but fair to everyone. Government cannot keep out of the relationship between labor and employer however.

Politician’s interests are harmed when there is a level playing field. The people, either as employer or employee, will not have need for the services of government when there is equilibrium, and as everyone who has grown up in a market system knows, where there are no customers there is no business. Fortunately for politicians, their predecessors have put in place a myriad of rules and regulations altering the balance of power. Those past intercessions have so warped the relationship for so long everyone has got used to it. All a politician need do is pander to one of the two factions and a steady flow of campaign revenue and political backing come with that choice. That is why illegal immigration is encouraged, it drives down wages for Americans, while at the same time labor unions get special laws passed to help their cause, to drive up wages. Both policies backed by both factions.

Marx wrote passionately about the alienation of work. That some jobs are terrible and so people shouldn’t be forced to do them by their ever gnawing stomachs. He called it unfair that people had to do work that alienated themselves from themselves or their higher selves. All sounding, of course, humane and compassionate. What Marx didn’t address however was the fact someone has to do those jobs that are alienating. Septic systems have to be maintained, barns need to be cleaned and dishes need to be done, there are far worse jobs that need doing as well, if no one does them they will not get done. The answer from communists is to force those who have no political favor to do those alienating jobs by use of violence. Which makes perfect sense to a sociopath or psychopath who seeks to appear to have empathy.

Were government to stay out of the relationship between labor and employer, the wage rate would settle to a fair rate, and working conditions would steadily improve. Dirty jobs would be paid at a rate sufficient to get people to do them, there would be more jobs due to lessening of the drag effect regulation has on job creation, which would drive up the cost of labor due to the removal of slack from the labor force, the cost of labor would be more in line with the strata of… difficulty, education required and supply/demand for each job. Why should a lawyer make one hundred times more than a sewer repairman? Especially when there is a glut of people wanting, able and educated sufficiently to be a lawyer, and there is a dearth of people sufficiently able, knowledgeable and willing to repair sewers? Government intervention in the employee employer relationship warps the wage rate, otherwise both political faction’s would suffer a loss in power, that’s what drives it. The same faction in control of the media sets the societal norm. They decide what is called tolerance, kind and compassionate and what is called intolerance, hate, bigotry and fascist, regardless of reality. That is why the tolerant are called intolerant, the intolerant called misunderstood, the fair called unfair, the violent called peaceful, victims called occupiers and the kind called haters, it serves the faction in control’s… interests.

Sincerely,

John Pepin

Meritocracy… The Justice of Class Mobility.

Monday, October 12th, 2015

 
Dear Friends,

It seems to me, the real measure of justice in any society is the ability to get ahead, to move out of the social strata one is born into, and either up or down depending on the merit of the individual, and not because of their political favor. That used to be the case in the US for example, so much so that back in the late 19th century the lack of interest of Americans for socialism was explained by the socialist “economist” Thorstein Veblen, Americans don’t want to damage the interests of the rich, because every American knows he or she could become the rich, and no one wants to damage their own interests… Of course many did become rich and many more did not. Yet everyone understood the path was open for them. Opportunity has been the draw for people the world over to immigrate to the US. People would come so they could just have a chance to get ahead if they worked hard and were smart. Many did get rich and many did not but the opportunity was there. During that time, the standard of living of the American citizen rose in a way that has never been seen before, not only elevating the lot of Americans but spilling over into the rest of the world. Today that distinctly American dream, meritocracy, has been effectively crushed by our education system, regulations and cronyism.

Joseph Schumpeter said that as soon as someone becomes rich their first order of business is to close the door behind them, so no one else can come through that door and become rich. The reason is that the newly wealthy don’t want to have to face competition. Competition that lowers profits, makes one work harder for those lower profits and worst of all, creates the potential the wealthy could slide back into the middle class. The means at their disposal to close that door is regulations. Cronies use the straw dog of public safety to get regulations passed the create a barrier to entry. While an established company, with all the accouterments, can easily meet even draconian regulations, someone trying to get a business off the ground cannot. The door has effectively been closed.

Cronyism is an offshoot of closing the door. The wealthy have the money and connections to effect laws and regulations and so they use them to make easy profits. In his famous film series, Free To Choose… Milton Friedman said, if someone opens a business that sells it’s product at a lower price and has better quality, the old business owner has two options, they can lower their price and raise the quality of their product, or they could go to government and get the competitor shut down. The first option is out of the question as it requires hard work and smarts, while the second option is a no brainer. When they can they use government to ensure your profits and crush competition. Moreover, those same government connections that were formed by crushing competition can be used to get direct government money in the forms of grants and subsidies. What nation wants to loose it’s steel industry? Since every industry must corrode from within, whenever cronyism is used, it needs more and more “assistance” to stay in business, else that industry will be lost.

Regulations are the means to cronyism. Since regulations are made by unelected bureaucrats, they bypass the normal system for making laws, and can be wielded with impunity and with great effect. In addition, the cost to the economy and class mobility is irrelevant. A law is publicly debated and is subject to public scrutiny, but a regulation is passed in the dark of night, the only ones with input are the cronies who stand to gain or loose by that regulation. Examples abound, especially recently, like the new rules for the Internet, most of which are still secret, the new Pacific trade agreement, etc… the most pernicious effect of regulation however, is to limit the mobility of the population to rise above, or drop below the position they are born into. The intent and effect of regulations is to stifle class mobility.

The government monopoly education system limits our children, instead of teaching them anything is possible, it teaches them to be robots. Everyone needs to get the same education, go to the best college they can get into, take on so much debt they have to get a job and closes off both their motivation and ability to become entrepreneurs. Common core is the perfect example of this in action. Imagine trying to figure the yardage of concrete needed for a basement using common core math? It teaches the wonders of socialism where there is no possibility of class mobility, class under a socialist state is decided by political favor. The history of mankind is perverted to equate individual liberty with atrocities, when the direct opposite is true, overly powerful governments commit atrocities, while limited government is limited in it’s ability to commit atrocities. The education system has become a way for the state to remove the people’s belief in class mobility, and so make us willing to do damage to politically disfavored groups, because we have been taught… we can never become rich ourselves.

Class, caste, position, social strata, etc… are mere artificial constructs to pidgin hole people and limit them. It should be obvious to anyone with an open mind, therefore, in a society where you are stuck in the caste, class, position or social strata you are born into, regardless of your individual merits, is unjust. Justice by definition, is the equal treatment of people, where people are treated unequally, depending on some artificial construct of the elite, trapping people in the circumstances of their birth, is therefore by definition unjust. Those institutions that enforce class immobility then are damaging to the lot on mankind. Cronyism, regulations, personally limiting monopoly education system, unlimited government, socialism, etc… are by design, created to limit class mobility, and must be eliminated if we are to advance to a place where there is real justice, actual opportunity and a rising standard of living. You know in your heart this is true… speak the truth for others to hear, act so that others may follow and vote with your rightly understood interests at heart, and not out of envy or hate, and together we could restore opportunity to our kids.
Sincerely,

John Pepin

Regulation in Canada and the US

Thursday, December 11th, 2014

Dear Friends,

It seems to me, the contrast couldn’t be more stark between the policies of Canadian Prime minister, Stephen Harper and the US President, Barak Obama, the difference being their exuberance to regulate. I am of course talking about Stephen Harper’s response to new regulation over Canada’s oil and gas industries. Harper called the idea, “Crazy economic policy…” While at the very same time, Obama is implementing new regulations to limit the amount of potentially explosive gasses in crude, shipped out of North Dakota. The first protects the wealth and freedom of the people while the second corrodes our economy, wealth and liberty. Unless we grasp this fundamental difference between sound economic policy, and poison pill economic policies, we will be forever trapped in an ever downward spiral of poverty and despotism.

Stephen Harper was the only head of state that successfully navigated the financial crisis with his country’s economy intact. Canada didn’t see the collapse of it’s economy like every other nation on Earth did, (including China), and it’s banking system emerged as one of the most stable on the planet. Today, Canada is experiencing a decline in their fortunes due to the floor dropping from commodities prices, because Canada’s economy is dependent on natural resources as the primary growth mechanism. Yet even with the steep decline in commodity prices the Canadian economy is still firing on all eight cylinders. Because of Harper’s policies.

The US on the other hand, was the primary cause of the financial collapse. The policies that led to the crisis had their roots in Congress’ desire for economic tinkering. Democrats had become incensed by what they called “Redlining of neighborhoods.” To rectify that “unconscionable” situation, they forced lenders, via regulation, to give loans to people who the lenders knew couldn’t pay back. Economics is like water, no matter how tight you hold your hands, you cannot squeeze water, and like water those regulation caused the banking and financial system to have untended consequences. The financial system had to create new and innovative ways to mitigate the risks of default by borrowers, through bundling huge numbers of mortgages together, including many good loans with a few bad loans, (a derivative), with the idea that if a few went underwater, the rest would be fine and the underlying security would be solvent.

When the housing market went into bear territory the whole scheme came crashing down. More loans were going into default than projected, due to home owners not only unable to pay their loans, but unable even to refinance, because their principle had now become higher than the underlying asset price, IE, their homes. Many lost their homes and many voluntarily gave the keys to the bank. This caused the whole economic system to become unbalanced, (since no one could determine the real value of those derived financial products). With no one able to fix the value of the derivatives, the banks balance sheets became opaque, leading to them looking to their insurers to re balance their books. The giant insurers like AIG became insolvent with so many claims, and the house of cards came crashing down… all because of the government meddling in the economy to give a politically favored class an advantage in an otherwise free market exchange.

Canada changed course when they elected Harper. They went from an uber progressive state to a conservative one… just in time. Harper has been trying to remove burdensome regulations from the books and standing strong against new economy destroying regulations. This latest statement from Harper is telling of how cagey he is when it comes to economics. He rightly realized that further hobbling an economy that is already being slowed by external forces, (the global slowdown), would be counter productive if Canada is to see economic expansion and an improving standard of living. The difference was further highlighted by the Canadian dollar versus the US Dollar, during the financial crisis, for the first time the Canadian dollar became more valuable than the US dollar!

Regardless of the economic weakness, Obama and his new class progressives are increasing regulations at light speed. The newest regulations on the US oil and gas industries is supposedly to protect people from exploding rail cars like in Quebec. Now, that makes perfect sense, unless you know the facts of what happened in Quebec. The cause of the accident that burned Lac-Megantic to the ground, was faulty brakes that allowed the untended full train to roll seven miles down a hill, and derail near the waterfront. It had nothing to do with any explosive gasses it had everything to do with the brakes on the train. Moreover, if safety is the real concern, then a pipeline could easily be built that would transport the crude more efficiently and more safely, but the downside of that idea, is that politically favored Warren Buffet would loose millions, since his trains are the ones that transport the crude.

Today the US is mired in an economic depression in some ways more pernicious then FDR’s. The reason is the incessant meddling in the economy by the elite to enrich their cronies at cost to everyone else. Thousands of hard working bureaucrats tirelessly writing new regulations to destroy the world’s economy has become the norm. Canada is trying to chart another course, piloted by Stephen Harper, that will enrich the average Canadian. Every time deregulation has been tried, it has resulted in economic prosperity, and every time the elite have become enamored with economic shenanigans, the economy has gone into depression. This time is no different. What I hope will be different, is that we will learn our lesson, that heavy handed regulation of an economy, destroys that economy. Sadly, with all the hard lessons we have ignored in the past, I doubt we will learn it this time, but at least Canada is on the right course… for now.

Sincerely,

John Pepin

Bureaucracy, Law and Separation of Powers.

Monday, June 16th, 2014

 

Dear Friends,

 

It seems to me, nothing can prove the out of control growth of the bureaucratic regulatory apparatus of the Executive branch, than the fact that now the Legislative branch needs to pass legislation to stop regulation they find appalling. Congressman Peter Welch of Vermont is sponsoring a bill that would stop some new regulations, prohibiting cheese from being aged on wooden boards, or in wooden containers. As with most regulations this one is absurd, makes no sense from a scientific perspective, legal or even a sociological perspective, but it is an example of bureaucrats working diligently in the dark, regulating how we do everything and in every way. Their regulations are not subject to the will of the people, and are not Constitutional, but they have transferred tremendous power from the legislative branch to the Executive, undermining the intent of our Constitution’s foundational thesis, that of the separation of power, all for the dubious goal of efficiency in government. As we move further and further away from Constitutional rule, and into the chimeric bastardization of our government, we can expect our leaders, especially the Executive, to act more and more arbitrarily, until we have arbitrary government in all but name.

 

Constitutions are a concept that was invented as a way to limit the propensity of governments to become tyrannical. History shows that there has never been a government, no matter how well devised, that didn’t eventually become despotic. Rome was a republic for century upon century but eventually became a tyranny. That great republic began it’s death spiral the moment the people accepted arbitrary power in the hands of the Caesar, whether wielded by Marcus Aurelius or Nero, that power corrupted not only the man, and the Praetorian guard who protected him, but the society that became dependent on it as well. This is what Constitutions are supposed to prevent. If they are not followed however they loose the ability to limit and instead provide cover for a would be dictator.

 

Separation of power is the primary means the US Constitution, our Constitution, is supposed to prevent arbitrary rule. History shows that most of the time despotism comes from the Executive. Separation of powers is meant to prevent this propensity of rulers by limiting their absolute power and divesting that power in other segments of government, then pitting those segments, (and political factions), against each other, like using a fire line to stop a fire. Federalist Paper number ten explains this far better than I can. The power of a Constitution to reign in the avarice of a leader depends on it’s being adhered to.

 

The power to pass laws was given solely to the Legislative branch in the US Constitution. Our leaders have evolved the definition of the words in the Constitution to allow for a bureaucracy to take over most of the legislative functions of the Legislature. This has ostensibly been done to improve the efficiency of government to regulate the actions of it’s citizens. While it has allowed government to regulate far more efficiently… that regulation is anything but efficient. It drastically diminishes economic growth, personal freedom and US competitiveness, all for some pie in the sky notion of government efficiency. The truth is, the most efficient government is a tyranny, but is that where we want our government to go?

 

Keeping the thousands upon thousands of bureaucrats busy, as well as the hundreds government adds every year, presupposes that reams and reams of regulations must be written, else the need for the leviathan of the bureaucratic government goes away and the bureaucracy becomes redundant. Making those tens of thousands of high paying government jobs all go away. Bureaucrats, who are the modern equivalent of buggy whip weavers, cannot stand for their cushy, pensioned, well paid careers with government go away, and so they have a self interested need to keep the regulatory bandwagon rolling. The deleterious effect on society, our economy and even the destruction of Constitutional rule is irrelevant, and so our Legislature is taking up the all important question, whether cheese should be aged on wood as it has been for thousands of years.

 

Since the Legislative branch has given up so much of it’s power to the bureaucracy, it finds itself in the uncomfortable position where it has to pass legislation, to protect certain politically favored industries from the negative effects of regulation, in this case the cheese industry. When the legislative branch must pass a law to stop a regulation, it is proof positive that the kudzu of bureaucracy, has outgrown the garden. There was a Supreme Court ruling a few years ago that in effect said, since the Legislative branch had willingly ceded their power to the Executive’s bureaucracy, that bureaucracy has now the same power to pass regulations as if they were law, Constitutionally passed by the Legislature and signed by the Executive. That ruling, along with a host of other absurd rulings by the Supreme Court, has evolved our government away from Constitutional limits on the power of government as intended by the founders, to this bastardized inbred monstrosity we now live under. The real problem here, is the disdain and loathing our leaders hold for our Constitution, from the Executive through the Legislative and the Judiciary branches, all the way down to the lowly bureaucrat toiling away in his or her cubicle, for eight hours a day, making rules for the rest of us to live under, without scrutiny, or oversight… and without Constitutional authority.

 

 

Sincerely,

 

John Pepin

 

 

 

Oligarchy of The Red Tapeworm

Thursday, March 27th, 2014

Dear Friends,

 

It seems to me, the legal system is supposed to facilitate market interactions, but in reality the legal system more often than not, is a parasitic drag on the free market. Like a tape worm imparts some resistance to diarrhea when it is small, it eventually outgrows it’s host, and if it isn’t dealt with, the host eventually starves to death no matter how much food they eat. This is not to say that there should be no laws. It is to say that the legal system in most western countries has out grown their hosts, the economies, and is draining those economies the vital sustenance, capital, they need. Many people have pointed this out to no avail. The reason the legal system always overtakes the national good is because Lawyers are a defacto oligarchy. Our economic futures rest on our ability to prune back the parasitic nature of our legal systems, else we and our children will live in an economy that is being starved, by the very legal system that is supposed to protect it.

 

Market economies need standards, this is a basic fact of any study on market economics. People have to be able to make valid legal contracts, that are binding, we have to be able to sue for redress of economic harm visited on us… among a whole host of other valuable services a functional legal system provides. No economy can do without laws and standards. However, as Madison said in The Federalist Papers, when those laws become so abstruse, even a person knowledgeable in the law cannot possibly understand them all, you have tyranny.

 

The legal system is essentially a faction. This faction, like all factions, seeks the best interests of it’s members, no differently than a labor union. The legal faction is made up of attorneys. It is not coincidental that all governments have a large portion of their members as attorneys. Modern governments are broken into three branches, Executive, Legislative and Judicial. This was Montesquieu idea, to limit the source of most tyranny that ruins republican government, an overly powerful Executive. Break the authority from the Executive to adjudicate over law, and form it into a new, or third branch, the Judicial, (the lawyer’s exclusive branch). So, since all three branches are largely populated by lawyers, most legislators are attorneys, most Presidents have been lawyers, and with one branch exclusive to lawyers, the legal faction is overly represented in government. This makes the legal faction an oligarchy. They eventually rule, not in the interests of everyone, but in the interests of their faction, the classic definition of an oligarchy, ala Aristotle’s wrong forms of government.

 

Many learned people have suggested tort reform but it never gets anywhere. That is because the very people who would have to pass it, lawyers, would suffer real harm from it. The legal faction’s power would be diminished and the members of it, attorneys, would suffer economic harm. That is why tort reform is always dead on arrival whenever anyone offers it. Moreover, every time a new regulation is written, a new law is passed, a court finds a business has to pay a litigant for burning herself with hot coffee, or a judge rules a legal contract is null and void, along with many other legal abuses, the demand for lawyers goes up. Economics 101 is supply and demand, as the barrier to entry is raised by more and more stringent testing and pretesting requirements, lowering supply, while at the same time the demand for attorneys is elevated by absurd rulings and tomes of arcane regulations and laws, raising demand, the profit for lawyers must necessarily go up.

 

That is why the media and lawyers attack oil company profits in the tens of billions but no one decries the profits of law firms that run into the hundreds of billions. Doctors are vilified for charging what they do to save the life of a child but the absurd charges attorneys get away with are ho hummed. The legal faction controls the government and thus the conversation. The fees of lawyers goes up, along with the regulations they pass and society has to follow, in a Fibonacci curve while economic growth dwindles away. No matter to the legal faction however, their fortunes continue to rise. But, like the Roman empire was destroyed, in no small part by the stifling regulation and bureaucracy, their legal system built up, our modern societies are being eaten from within by the red tape worm of the legal faction. Most likely, we will end up like the Roman civilization, because we refuse to learn the lesson history teaches us.

 

 

Sincerely,

 

John Pepin