Okay, now Barack Obama is a lawyer, and at some point in her life Nancy Pelosi and all or virtually all of the Members of the House of Representatives have been exposed to Article I §8 of the United States Constitution, where it says

No bill of attainder or ex post facto Law shall be passed.

But, here the House is passing a bill to effect an ex post facto tax, which if it becomes law will be struck-down by the Supreme Court as unconstitutional. It would be the taxpayers who paid for the hopeless defense of the unconstitutional law, just as they've paid for the time spent for the House to craft and pass this unconstitutional bill. There's no attempt here to protect the money of the taxpayers; there's just a lot of posturing by Congressmen and by the President at the expense of the taxpayers.

The best that ever could have been accomplished would have been to make a precondition of the bail-out money be that those who continued employment with these firms would agree to waive some level of compensation for the previous year. (There'd still be the issue that some recipients have left the employment of these firms, and that others might refuse to waive their compensation even though it would cost the firm the state funds, and some of those who refused might have contracts that precluded their dismissal for such refusal.)

It never so much as occurred to those who designed the bail-outs to attempt to impose even those sorts of preconditions, because they regard themselves and the executives of these firms as part of a same elite, for whose benefit the bail-outs are primarily designed.

In any case, the House of Representatives, with the blessings of the President, is consciously spending money for nothing but political gain.

As most or all of you have read or heard by now, the economic news for the the last quarter of 2008 was quite bad

and the news from the stock market has grown worse

Now the New York Times frets

Of course, if they believed the naïve Keynesian rhetoric that has come back into political fashion, then the claim would be that Obama's aggressive spending plans were insufficiently ambitious.

I'm wondering whether it's merely the so-far unpassed budget that is under threat. As I noted earlier, the stimulus bill is an enormous blow to the economy, and was passed only as a result of some combination of willful blindness, knavish exploitation of a crisis in which politicians did not actually believe, and desire to worsen things on the expectation that even greater expansion of state power could be achieved. In the case of all three of these motivations, one could expect some politicians to now regret what they have done in passing the bill; what seemed like a bearable amount of plunder may now seem like a grave miscalculation. I don't think that it's politically possible that the legislature would overtly repeal the stimulus bill, let alone that the Obama Administration would openly reverse itself. But subsequent legislation might implicitly pare some of the programmes, and a formula might even be found for the Administration to suspend some programmes without legislative action.

Of course, the Administration and the Democrats in Congress know that, if they repealed a significant share of the stimulus bill even obliquely, then their opponents would pounce on how this repeal demonstrated that it were not a stimulus bill. So those who supported the bill may have a tiger by the tail.

There is a myth (demonstrated to be false by economist Ronald Harry Coase about 50 years ago) that, before the state stepped-in to regulate radio transmissions, there was simply chaos, as one would-be broadcaster tried to over-power the signal of another.

Actually, what happened was that broadcasters who wanted to work in the same frequency ranges and in the same geographical regions as each other went to court, and the courts began to apply the principles of homesteading to broadcasting. The main questions, as with the use of land, was of who was there first. Basically simple (though there certainly could be nuances).

Now, I would acknowledge the point, made by Donald Clayton Hubin and others, that allowing someone to own the use of one part of the electromagnetic spectrum doesn't seem different a priori from allowing them to own any other, and the intuitions of many of us would be immediately alarmed at the idea that someone should own, say, red in the Columbus PMSA. But we are alarmed in the context of there already being meaningful use of red by everybody; given that use of red, we could conceptualize the existence of a sort of easement actually giving us each a right to its continued use. On the other hand, prior to the development of radio, people did not so much use those parts of the electromagnetic spectrum as accidentally generate such electromagnetic radiation. For important parts of the spectrum, that remains the case. And, in-so-far as such accidental generation may be long-standing and so forth, one could believe that there was an easement allowing such continued accidents, but otherwise impute a property right to broadcasters in the same ranges as the accidents.

There's also a bit of apparent oddness in the fact that broadcasting amounts to vibrating the surrounding area; this seems a use of the properties in the surrounding area. But, while it's certainly a use, we have to be careful about the issue of whether it is a use of the property of others. We tend to equate property with the object against which a property claim is made. For example, we would normally simply say that Thomas's house is Thomas's property; we would even normally continue to say this if Thomas rented the house to Richard. But the notion of property rights as distinct from use rights is incoherent, and the rental agreement transfers some of Thomas's property rights to Richard, even if only rights specific to a defined interval. So, backing-up, we need to at least ask whether the property rights of those otherwise owning physical things in the area surrounding a broadcaster included exclusive rights to vibrate those things, or at least exclusive rights to vibrate them other than in the aforementioned accidental manner.

The reason that the airwaves were declared to be public was not because there was no coherent model of private property in the use of the electromagnetic spectrum, and the declaration certainly wasn't to end chaos.

(Nor was it because there is some sort of natural monopoly in broadcasting. Consider how few daily newspapers the typical city now has, as opposed to how many radio and television stations it has.)

The nationalization of radio broadcasting was to introduce censorship. People were broadcasting opinions that the state and its clients didn't want broadcast, such as attacks on the medical profession. Freedom of speech was the chaos that was stopped.

This brings me to the Fairness Doctrine, which was introduced in 1949 and prevailed until late-mid 1987. The doctrine ostensibly required broadcasters to present opposing views on important and controversial matters, in a fair and balanced manner.

Even if it had done this much, it would have been a gross violation of freedom of expression, much like forceably demanding that any of you reading this entry both speak-out on important and controversial issues and that you always defend, as strongly as practicable, views that you oppose. Operationally, you couldn't be a spokesperson for your own views so much as a reporter of what views were had.

But, in practice, the Fairness Doctrine was part of a system of disguising gross biases as balance. For example, the gentlemen's agreement (sans gentlemen) between the prevailing political left and political right has been that only both sides are represented, not the views of those who do not fit on whatever might be the left-right spectrum of the day, the Fairness Doctrine abetted the impression that no one (or no one who mattered) could have such views. Beyond this, the politicial left, for most of this period, was largely successful both in disguising their own views as neutral, and (when unable to do that) in selecting poor representatives of the political right to present opposing views; thus not even both sides were given the same opportunity to be heard.

The Doctrine fell because of pressure from those who opposed censorship in principle and from those who were given the short end of the stick (the political right) or given pretty much no end of the stick (everyone not on the left-right spectrum).

Once the Doctrine fell, the political right developed a sort of counter-weight to the main-stream media. Against CBS, ABC, NBC, PBS, and NPR, the right threw-up first a network of AM radio stations and then Fox Television. In terms of combined listenership and viewership, these countervailing broadcasters don't match the old main-stream, but it upsets the political left that there should be grossly biased broadcasting, when the gross bias isn't their own. And, in spite of their continued dominance in the more important medium of broadcast television, it hugely disturbs the political left that the right-wing has a larger presence in AM radio.

Parts of the left persuaded themselves that the right-wing dominated talk radio because powerful corporations were willing to sacrifice direct profitability in order to mold public opinion in favor of the political right, and therefore presented only personalities such as Rush Limbaugh, rather than what would be popular progressive (social democratic) personalities. Hence, Air America Media. But, in operation, Air America has not been profitable; it has been a meaner, dumber NPR, dependent upon subsidies.

So there has been increased interest on the part of the left-wing in a revived Fairness Doctrine. And even trial balloons about somehow applying it to the Internet. Therefore, I am pleased and relieved that the Obama Administration has declared that it does not support a revival of the Doctrine. I would really like to believe that this decision is based on a respect for freedom of speech, but the plain fact is that the present SCotUS has a majority bloc that could be expected to reject a Fairness Doctrine as unconstitutional, and the Court could well continue to have such a majority for at least the next eight years. (Justices Kennedy and Scalia are each about sixteen years younger than Justice Stevens.) But if just one member of that bloc were to leave the court then the Obama Administration would be faced with a new calculation.

Calvin Woodward, at the AP, calls this an overstatement:

Most economists, almost unanimously, recognize that even if philosophically you're wary of government intervening in the economy, when you have the kind of problem you have right now … government is an important element of introducing some additional demand into the economy.

but it goes well beyond mere overstatement. It's an gross lie.

It's bad enough when people use consensus to argue for a proposition that ought instead to be tested by logic applied to brute fact. But this business of using counterfeit consensus is just actively vile.

Any time that the state spends money, there is some cost to the economy.

The state can tax, in which case the cost is obvious. But I put obvious in quotation marks here, because people don't seem to think past the fact that money is taken, without much thinking that the value of money per se is its purchasing power.

The state can print money, issuing new currency to fund its expenditures. The cost here comes because

where M is the total supply of money in an economy system, ν is the average frequency with which a unit of currency changes hands in the system, q is vector of the quantities of goods and services purchased in the system per unit time, and p is the corresponding vector of prices. If M is increased, and there isn't some off-setting increase in the elements of q, or a drop in ν, then elements of p must increase. If prices go up, then the purchasing power of the unit of currency goes down. Ceteris paribus, when the state issues new currency, the value of the holdings of currency that people already had is decreased. (There are some other, potentially far more costly effects than the direct loss of purchasing power, but I don't want this entry to mushroom into some huge treatise.)

In many modern states, printing money is made to look like borrowing, whereïn the ostensible borrowing is from a central bank, a special creature of the state, which prints money and uses this to make the loan to the state.

But the state may also more genuinely borrow money (especially when officials of the central bank think this better than printing more) in the financial markets. In this case, borrowing by the state shifts out the demand curve for loanable funds. Unless the supply curve for loanable funds were perfectly elastic, so that any amount of funds would be made available by lenders at the prevailing price — the rate of interest — that price will go up.

When people lose purchasing power to taxation or to an over-all increase in prices, they reduce purchases of goods and of services, and they save less, so that funds for investment are decreased, and hence investment is decreased. When the price of borrowing is increased, people borrow less for consumer purchases and less for investment. So whenever the state spends, no matter whether it taxes, inflates, or borrows, that spending takes a piece of the economy. Whether there is a net cost turns upon whether the activity funded by state spending is somehow more productive than the private activity that it has crowded-out.

As I have explained, state allocation of resources can be more productive only if private provision is hampered by transactions costs, and the effects of those transactions costs are greater than the combined effects of state transactions costs (red tape and all that) and the loss of economic coördination which results from substituting guess-work for market prices.

Okay, so this gets me to these stimulus bills in the United States legislature. Various numbers are associated with various versions, but the bill that left the House of Representatives was for about 800 billion dollars. And various commentators, both conservatives at institutions such as the Wall Street Journal and social democrats (liberals) at institutions such as NPR, have noted that only about one-eighth of the projects in that bill could be reasonably claimed to be stimulus, with the rest just being pork-barrel projects. Regardless of whether we buy-into the Keynesian hopes for about $100,000,000,000, the loss to the economy associated with about $700,000,000,000 in pork will be vastly greater.

It was claimed that a stimulus bill was necessary because the economy is tanking. The word depression is being bandied-about. And, yet, a majority in Congress and the President are pushing what will plainly be a massive hit on the economy.

To explain the behavior of these parties, we could offer various hypotheses. Many politicians are simply great fools; some politicians might believe that we are indeed on the cusp of an economic disaster, but be so greedy for the political gains associated with these projects that they just won't allow themselves to think. Other politicians might not believe the talk of economic crisis, but be knaves who participate in it, creäting a smokescreen behind which to seek much the same gains as are the fools. Finally, some of these politicians might both genuinely believe that the economic crisis is quite dire, and recognize that a stimulus like those proposed will be greatly damaging, but expect that the effects of the bill can be blamed on other things, especially upon what remains of the market economy, so that those effects become an excuse for even greater expansion of state power.

With regard to one particular politician, the President, I don't at all think that he's so great a fool as to misunderstand what a stimulus bill that is about 7/8 pork would do. He knows that he's pushing a hit on the economy. I don't know whether he is amongst the knaves who don't really believe that the economic situation is all that dire, or amongst those who want to engineer a greater crisis in order to have a greater excuse to technocratically restructure the economy. But when the President speaks of recovery as taking years rather than months, I worry that he is not merely lowering expectations to reduce future criticism, but revealing more ambitious plans.

(Underscore mine.) The selection of Warren is, one way or another, an illustration of Obama as triangulator — someone who cobbles-together a plurality based upon a reading of demographics and of polls, with little regard for the vision thing.

I don't know to what extent the present rank-and-file of the Democratic Party will tolerate an alliance with social conservatives of any sort; but, again, politics tends to be tribalistic. Many Democrats will find formulæ to rationalize cleaving to the Party as it now further intrudes into the bedroom as well as into the boardroom. Some will argue that the Republicans have forced such alliances upon the Democrats. Others will persuade themselves that they have to stick with Obama or lose any chance at progressive policy in any area.

If the Democrats succeed in forging such ties, the Republicans will have considerable trouble off-setting the lost numbers with classical liberals, who have been terrifically alienated by what the Republicans actually did while in power. Not, though, that there's really anywhere else for the classical liberals to go now, since the Libertarian Party sold-out for a cupful of thin, red stew.

I wonder just how long it's going to take the typical Obama supporter to move on from Denial to Anger…

…or if, indeed, they ever will. Much of politics has a sort of tribalism to it, under which people care far less about policies than they do about whether the coälition with whom they have identified themselves is in power. My friend Ronald once noted that, in some political factions, a willingness to turn on a dime when it comes to doctrine is often seen as the true test of merit.