Why Government Intrudes so much

One of the things that people seem to get upset about is how government intrudes on our lives, and how it seems to intrude more and more all the time.  The thing is that people don't seem to understand is that it is simply the nature of government to be intrusive, and for the most part it will never be enough for those that govern to keep from intruding more.  It shouldn't come as much of a surprise though.  The thing is that legislators don't seek to clear out intrusive legislature, they seek to create new legislature, and virtually all legislation is intended to intrude on the affairs of the citizenry.  Now this isn't always a bad thing though, despite what some people may tell you.  The fact is that freedom is great as long as you don't have to worry about other people, but when you have a society, there have to be limits to how resources are used and allocated.  And while some practices may lead to short term advantages for a small group or the entire community, those advantages may be overshadowed by long term consequences (which is essentially what pollution and pollution control rules are about just to name one).

There is a line though somewhere that the government should not cross, when government becomes too intrusive.  Depending on who you ask, you will get a different answer about what requires regulation, and where regulations are too intrusive.  So how do they decide what  to legislate?  Well, a legislator is going to have their basic positions on issues, and will be supported by those that either believe the same as legislator, or who can convince the legislator to support their positions.  The support comes in various forms, financial and political organization probably being the most important, which leads to significant influence coming from groups that stand to profit from legislation.  And since legislators are given the power to spend public moneys, there is a built in temptation for legislators to seek to benefit their supporters and themselves.  This can lead to a closed system where legislators actually believe that the actions and legislation they support are good for society in general because it improves the lot of those that they know.  And since it can be difficult to really monitor what legislators are really doing, it is very difficult to keep them from taking advantage of their power, and only partially likely to find out what abuses occurred until after the fact.
This seems to bring up a recurring problem with government, in that there are very few penalty mechanisms for abuses of power by those in position of power.  And while there is in theory a limit to the expansion of powers based on constitutional issues, reality plays out differently.
Depending on the nature of a law, and the nature of the opposition to it, we can have a situation where legislation can be enacted and enforced despite being unconstitutional, but to be struck down, someone has to be wronged by it and go through the judicial process before it will be reviewed.  And in the case where an individual has to endure a prolonged legal battle, and is eventually vindicated, those who created the law do not suffer on a personal level for the injury they caused.  At best, a victim of such a law can seek some sort of restitution from the state, but certainly not from the actual people that created the unconstitutional law.  Such a conflict could be avoided if a law underwent judicial review prior to being enforced though.  At the time of judicial review, there could also be a period where public commentary could be made prior to enforcement.  More importantly though, if a legislator or group of legislators is found to be constantly proposing unconstitutional laws, there can be a sanction against the legislator.
While this sort of system may not have been viable in the past, the speed of modern communications capabilities allows for a faster discussion of these sorts of matters, and also allows concerned parties to more effectively make themselves heard.  More importantly, it creates a better braking system against legislation that subverts basic constitutional principles.  Implementing such a system on the other hand likely requires some serious re-working of the existing system.  It is certainly possible, what is required though is the political will and the technological implementation.  I believe the second is already in place.  It will take time for the first to become realized.

Constitutional Crisis

 

And here we are, with another constitutional crisis, and it remains a low level story.  Now, the problem is the War Powers Act, aka the War Powers Resolution of 1973 (50 U.S.C. 1541-1548).

What is interesting about the War Powers Resolution is that while it states that an action is “illegal,” there really is not much in the way of an “or what” about it.  With that said, Congress always has the power of the purse strings to respond to a violation of the War Powers Resolution, but it’s not like the War Powers Resolution granted them that. 

Robert Naiman’s article in Monthly Review discusses what happens at length, but in a nutshell, congress sent the Obama Administration a stiffly worded diplomatic memo asking the administration to do some explaining, and gave them another two weeks to do it.  It’s really not clear what happens after that if the administration ignores them, or gives them lame explanations (of course, the Congress retains the power to withhold funding).

This highlights a fundamental problem with our governmental system, that starts at the level of the Constitution.  There are essentially no repercussions for acting outside of the rules, and while a rule can eventually be declared unconstitutional, in the meantime people are deprived of “fundamental rights.” 

When we have laws that can essentially be ignored with impunity (or virtual impunity), i.e. laws without consequences to the individual or group that breaks said laws, what is the point?

There was a lot of hullabaloo surrounding the Iraq war, and how it was an “illegal'” war, despite congressional approval.  But I certainly don’t recall many claims that the root of the problem was perjury (although there was the mantra “Bush lied, people died).  Right now we in fact have an illegal war (although it is a limited war), and there just isn’t much outrage.

I do believe that the media is partly to blame, but it is also the American People who just don’t pay attention to things that are really going on, and important to the functioning of the republic.  The real question though, is how can that change?

Of late, I have been talking and listening to people I know, and there is certainly a subset of reasonably educated people that I know that are concerned about the fiscal future of the United States, which encompasses a number of aspects of what will happen should there be a currency collapse.

The possibility of a currency collapse has plenty of historical precedent. And it might lead to a number or outcomes. Currencies collapse all the time, but it has been quite a while since the United States experienced a currency collapse. There is a difference though from previous experiences with currency collapse today though, since the American Dollar is the reserve currency for the rest of the world. I have seen this referred to as "Dollar Hegemony," and it gives the U.S. dollar a very special status when compared to other countries. When you hear about talks regarding a creation of another system for a global reserve currency (usually a "basket" of national currencies), what they are talking about is creating a currency to buy goods with globally. Essentially a reserve currency is the currency that all exporting nations accept for their goods. So, consider a small country, say Thailand. Now Thailand has its own currency for in country transactions (the Thai Baht), but if Thailand wants to buy Oil from, say, Nigeria. Nigeria has its own currency as well, the Naira. Well, turns out that Nigerians aren't too keen on holding Baht, because, well, if they want to buy things that Nigeria doesn't have, they have to convert the currency to the currency of the nation that does have the stuff they want. Given the number of countries out there, and the large differences in economic scales, global governments decided to settle on U.S. dollars as the universally accepted money.

This has clearly served the U.S. well since implementation, and I'd say it has served the American people well. Looking at it from a global perspective is a little trickier though. Not the point of this ramble though, so let's stick to the American perspective.

Right now the U.S. is going through some tough economic times, and there are issues underlying that which Americans simply don't want to face up to. Now much of the issue has been about globalization and a phenomenon called "Wage Arbitrage." With improved communications technology allowing knowledge workers to corroborate with lower wage (but similarly educated) counterparts overseas, competition is fiercer, and wage arbitrage can hit virtually every level of education. And our educational system is not designed to create entrepreneurs from an early age, but rather it seems to be designed to create middle management. Now management is certainly important, but it is also becoming more and more fungible.

Worse though is the fact that the U.S. government has become addicted to easy credit, and made financial promises that are going to have to be rescinded, or at least substantially restructured. Whether it is possible to elect a leader that truly makes those reforms a priority remains to be seen. But whether they campaign on a promise to do so or not, the other problem is that there is a limit to how much lending the rest of the world is willing to do, and there is a limit to how much the structural deficit can be monetized.

What I do expect is an extended period of inflation along with wage readjustment, followed by a requirement to further borrow from the global markets, and such borrowing will be met with specific austerity provisions, forcing whatever government is in place at the time that happens to face the prospect of default, or implementation of austerity measures, which will give them some level of political cover to implement the austerity measures that will satisfy global creditors.

There are other possible scenarios, but I see this as the most likely. Of course, if this scenario does play out, savings is not a good place to have your assets parked in. The trick will be to identify producing assets that have long term production value that are not already overvalued. International real estate, manufacturing, and of course precious metals and energy remain viable options. Land with some productive value is likely always going to retain some level of value. Precious metals can crash unless they have industrial usage as well (and for this, I see silver and Platinum as the real hedges, but Gold has the rep). Energy has some exposure to technological innovation pressure, but the infrastructure for an oil dependent world is expanding, and unless you feel you can credibly identify a next generation energy play, I think that Oil will remain profitable, with usurpers taking long enough from an infrastructure point of view to be able to unwind should the markets move away from oil due to some sort of technological innovation.

But expecting a U.S. dollar currency collapse in the next few years I see as highly unlikely. Envisioning a credible scenario for that is difficult, and I expect it requires a severe global crisis that likely looks like a serious hot war that draws in the U.S. and either China, or potentially the EU.

A lot of people think of the Middle East as a land where betrayal is a common attitude. But let's face it, if you were in the Middle East, you would be wondering why it is that everyone that comes along can't be trusted.

The recent events in Egypt and Libya highlight how foreign policy has failed the common man in the Middle East. Now that popular uprisings have taken the fore again (this isn't a new thing in the Middle East), trying to understand what is going on is important. And what it ISN'T, is an uprising of Muslim extremism, and so far it seems that we have managed to avoid that perception.

That isn't to say that Muslim Extremism will not manage to actually take control over time. Part of that probably depends on what you call Muslim Extremism.

http://winteryknight.wordpress.com/2011/03/02/pakistan-muslims-murder-christian-politician-for-opposing-blasphemy-laws/

http://edition.cnn.com/2011/WORLD/asiapcf/03/02/pakistan.minister.shot/index.html?hpt=T2

Now I don't know if you consider Pakistan as an extremist Muslim country, but they are moving to implement the death penalty for criticizing the Muslim Faith, and the sole Christian Member of the Pakistani cabinet was assassinated for opposing that law. Pakistan is considered one of our chief allies as I understand it, so just who is it we are supporting in the Middle East?

Now this isn't just about the United States, but the rest of the world, although I think it's instructive to look at the Western World in particular. And the fact is that the Western World (including the United States) has been either actively or passively supporting despots who are willing to keep the oil flowing at the expense of their populace while enriching themselves and their inner circle. Expressions of support for the "will of the people" are clearly going to ring at least a little hollow when the tear gas that is being used on the protesters is stamped "Made in the U.S.A." Or of course, when the jets that are being flown to strafe rebels/insurgents/freedom fighters are made in France.

And even if the insurgents/rebels/freedom fighters win, there is already an infrastructure there that benefits foreigners when it comes to their most important national resource, and I do mean Oil. Should the old order fall, should the contracts that the old order entered into remain in force? Is the balance of payments fair to the Middle East when you look at the standard of living they have is? If the graft was directed towards the populace (let's assume that the Ghaddaffi regime has managed to siphon off 13 billion dollars, just for illustrative purposes), how much would that money have affected the general population. Libya's population is around 6.5 million people, so if we simply spread that money out to each Libyan, they would get around $2,000.00 today (or if we say that the 13 billion was stolen over 10 years) each Libyan would have gotten $200 a year for the last ten years.

If the average Libyan aspires to a lifestyle that is even half as expensive as the American lifestyle, how much is their Oil worth? This is a scenario that repeats itself over and over in oil producing nations, and when democracy has reached the stage that the Oil policies could trend in that direction (look closely at the history of Iran), the forces of democracy get toppled by foreign forces, a strongman is put in place, and then an uprising follows, which can get upstaged by fundamentalist Islamic forces. And the reason for that is that when it comes to the point that folks need to use guns to topple the strongman, fighters who have a religious fervor for their cause fight really, really hard. And if they succeed, well, the spoils of victory and all that.

It didn't take that sort of fighting in Egypt, so Islamic Fundamentalists didn't get to shine all that much, so the people power isn't likely to give them a lot of credit for the victory. I don't hear a lot of talk about the religious fundamentalists being involved in Libya, but I'm certainly not going to be surprised if they do become major players there.

At least Libya's contribution to the global oil supply isn't really crucial, but don't be surprised when they really don't consider anybody their allies, even if they do ask for help. The middle east may see betrayal as just the way things are done, but they have learned that from the West.