A Second Hand Conjecture

Redstate
A good description of what just happened to Fannie Mae and Freddie Mac and some reasons why. This made me laugh. “If we were in China, they’d probably have “committed suicide” with bullets inexplicably entering the backs of their heads. I’d certainly want to shoot them if I were a shareholder of either GSE. There are some things the Chinese do better than we do.”

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Always demanding when they need you, useless and even obstructionist when you actually need them. Our friend Geoff Morrell can serve as something of a personification of that characteristic in fact:

Pentagon spokesman Geoff Morrell said the Georgians had requested U.S. help in moving their troops. But he said the Pentagon was looking for a way to assist without appearing to support Georgian military operations against the Russians.
(Los Angeles Times)

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photo: Simón Pais-Thomas

Toronto police recently seized shipments of 10,320,000 counterfeit cigarettes from China (PRC authorities themselves intercepted nine billion in 2007). Chinese made counterfeits bearing fake American branding such as Marlboro, are produced “in underground operations, caves and old warehouses,” and shipped through Vancouver for sale on a vast black market that has developed to evade the high sales taxes legitimate Canadian retailers must charge.

This illustrates another deleterious economic effect of the 23% national sales tax championed by Mike Huckabee (many more were discussed this morning here). As consumers are forced into the black market to escape artificially inflated government pricing, the quality of goods declines with volume, as otherwise quality-focused consumers are introduced to the cheap sub-market products of illegal trade for the first time.

Since the black market is by definition unregulated, there is no effective deterrent for engaging in product counterfeiting to substantially enhance margins, as black marketeers compete with each other, rather than with retailers who are priced and regulated out of the real market. Thus, with high national sales taxes not only does the tax base contract as the black market expands, the real quality of life enjoyed by the populace begins to erode as the marketplace is flooded with cut-rate and even dangerous goods:

Usually priced at $10-to-$15 per 200 instead of a retail price averaging $70, Martin said some contain tobacco scooped off floors. Cut-rate workers also chop up stalks and sometimes leave in lumps due to blunt cutters.

“It’s just human nature for people to save a dollar,” the 10-year investigator said.
(London Free Press)

The belief that most Fair Taxers have that people will not resort to the underground economy to reap fantastic savings, betrays the scheme’s essentially utopian nature. When prices are artificially inflated above natural market prices by the state, someone will always be available to exploit the opportunity. While it is human nature to save a dollar, it’s also human nature to make one when you can. And with a 23% burden resting on businesses to finance the welfare state, there are many to be made.

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A few weeks back I posted a facile little rebuke aimed at the national security implications of Green Party presidential candidate Alan Augustson’s political platform. Alan responded to this in such a way that I realized I had little idea what the Green Party’s position on security matters was, relative to its environmental policies. Indeed, rarely have I seen anyone even ask Green Party figures questions about this subject.

In continental Europe, Greens are expected to have a broad agenda on all conventional political issues from foreign policy, to funding for the humanities. However in the United States, Greens seem to have been ghettoized into answering questions solely on subjects like global warming or genetically engineered foods. This has the natural effect of marginalizing them into niche political interests within the broader Left. A Left that the media seems quite content to have dominated by the Democratic Party alone.

So, toward a better education in the broader politics of Greens, Alan was kind enough to sit down with us for a short interview on security policy.

From the outset, it should be noted that Alan is a fierce critic of current US security policy and naturally his ideas won’t find much agreement with me, or among postpolitical’s predominantly conservative audience. But I think you’ll agree with me that we managed to ask some fair questions and the interview turned out to be an interesting and instructive exploration of a radically different political perspective.

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