Mark W. Hendrickson

Mark W. Hendrickson is a faculty member, economist, and contributing scholar with the Center for Vision and Values at Grove City College, Grove City, Pennsylvania. These articles are from V & V, a web site of the Center for Vision & Value, and Forbes.com.

In My Native City of Detroit, Atlas Has at Long Last Shrugged?

I'm sad. Detroit is my native city. It's decline from being arguably the world's richest city to being America's "first Third Word city" is tragic, politically criminal, and a warning to other Americans.

The official declaration of Detroit's bankruptcy last week could not have come as a surprise to anyone familiar with the Motor City's atrocious financial condition. The city had no hope of ever recovering from its colossal over-indebtedness, and without a central bank standing by to create fiat credit to augment its insufficient revenue - the scheme that is the only thing keeping the even more colossally over-indebted national government solvent - the only question was when someone would pull the plug.

Fiscally speaking, Detroit had been in the "walking dead" category for years. The announcement by Detroit's emergency manager, Kevyn Orr, finally acknowledged the inescapable facts.

Clearly, some Michiganders are still in denial and refuse to face those facts. Last Friday, Ingham County Circuit Judge Rosemarie Aquilina insisted that the Chapter 9 bankruptcy declaration be withdrawn, stating the Michigan constitution forbids any action that would decrease the pension benefits of public employees. In the first place, Judge Aquilina should read my article about will and abandon the delusion that a constitution can alter reality by making nonexistent funds magically appear; second, it is an unjust constitution that confers a protection on public employees that private-sector employees don't have. A sounder constitution would have prohibited the city government from gaining control of employees' retirement funds contributions and instead have mandated that those contributions all go into a private fund in the workers' names where the city couldn't touch them.

The ideology that causes Judge Aquilina to believe that political action - policies, laws, even constitutions - can make reality conform to one's political vision is the very ideology that already has devastated Detroit. Politicians believed that they could create a "fairer" city by raising taxes on businesses and productive individuals and redistributing wealth to favored political constituencies, particularly the public sector unions. In doing so, they killed the goose that laid the golden egg.

The more aggressive the policies to take the wealth of the productive (including imposing an additional tax on those who worked in Detroit but lived outside the city limits), the more people and businesses left the city to avoid the city government's predations. This is the social and political pathology that Ayn Rand portrayed so vividly in Atlas Shrugged. One of her novel's central themes was that when a society, instead of respecting (and perhaps even being grateful for) those who produce the wealth that sustains and enriches our lives, treats society's economic benefactors as enemies to be plundered, a society embarks on a destructive path that, if unchecked, leads to doom.

So, what happens now? It's hard to feel sympathy for any of the vultures who are squabbling over Detroit's carcass. Municipal bondholders certainly don't merit sympathy for the huge losses they will incur. Anyone who invested in the debt promises of such a corrupt and poorly managed city deserves to lose money. They would have had to be blind not to see how broke the city was, so it seems that they made a cold, cynical, calculated bet on Detroit's predatory government continuing to be able to find victims from whom to extract more money. While acknowledging that there are dedicated policemen and teachers in Detroit who labor under difficult conditions, it is still hard to justify economically the generous pension promises they have received when the average response time to a 911 call is 58 minutes, and educational results have been so abysmal.

Just as individuals sometimes resolve to change their ways so that someone who has departed has not died in vain, the demise of Detroit may not be in vain if we learn its grim lesson and reform city, state, and the federal government from their destructive predatory policies. Atlas has shrugged in Detroit. You had better restrain government so that Atlas doesn't shrug where you live.

Big Brother Is Increasingly Watching You

One of the most hotly debated of all individual rights is the right to privacy. Generations of immigrants came to the United States to escape religious persecution, economic oppression, and the danger of becoming embroiled in the Old World's frequently recurring wars. These reasons are variations on a single important theme: People want to be left alone to get on with their own lives. What made America special was not only that it was "The Land of Opportunity," but it also was a place where what a person did with his or her life was his or her own business, and the state was obliged to leave Americans alone except in cases where a person had criminally trespassed upon someone else's rights.

Conservatives oftentimes look askance at the right to privacy. In a typical example, conservative author and talk-show host Mark R. Levin, writing at National Review Online in 2005, stated flatly:

. . . if you look in the Constitution, however, you will find no general "right to privacy" anymore then you will find a "right to abortion" - and for good reason: It's not there.

Mr. Levin is both right and wrong. True, there is no explicit mention of a "right to privacy" anywhere in the Constitution; however, the Ninth Amendment hallows and protects that right: "The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people."

In the never-ending struggle against government encroachments on individual rights and liberty, a citizen's right to privacy is of crucial importance and a powerful defense. Do you think that the Founders would approve or disapprove of the proposition that American citizens have an inherent right of privacy as a necessary shield and buffer against government intrusions such as those addressed by a plain reading of the First, Fourth and Fifth Amendments? The answer is self-evident.

What Mr. Levin and other conservatives find objectionable is the use (or, from their point of view, misuse) of the "right to privacy" in Supreme Court Associate Justice William O. Douglas' famous 1965 opinion in Griswold v. Connecticut, in which he engaged in somewhat mystical language, invoking the Bill of Rights' "penumbras" and "emanations." A mature understanding of our constitutional rights includes the recognition that these rights are not absolute. Every first-year law student learns that the right to free speech does not entitle one to shout "Fire!" in a crowded theater. Similarly, crimes of violence are not protected from retribution and punishment on the grounds that they were committed in private. We could argue until the cows come home about when and where the right to privacy must be curtailed in order to uphold other individual rights, but we never should disavow or devalue our right to privacy.

There seems to be precious little privacy from government intrusion remaining in contemporary American society. For example:

* As April 15 approaches, tens of millions of Americans regard the Internal Revenue Service as a financial proctologist, uncomfortably familiar with intimate details of our lives.

* Transportation Security Administration agents at airports use x-ray machines to strip us of any vestige of privacy or modesty about our own bodies.

* Government-operated cameras observe us at traffic intersections and other public locations.

* The surveillance may not yet be as extensive as depicted in the CBS television drama "Person of Interest," but the day of ubiquitous surveillance may not be far off.

* Uncle Sam apparently keeps all our Internet communications archived in California, and may be able to hack into our hard drives without our knowledge.

* There have been reports of domestic federal agencies using unmanned drones to monitor us from above.

Increasingly, it feels like Big Brother is always watching and privacy is going the way of the dodo.

The government equivalent of individual privacy is secrecy. The difference is that individual privacy protects freedom, while government secrecy jeopardizes it. One of the great protections for a freedom-loving people is government transparency - the ability of citizens to keep a watchful eye on their elected representatives.

Unfortunately, as individual privacy has been declining in America, government secrecy has been increasing:

* In spite of the existence of the Freedom of Information Act, it is often difficult or impossible to obtain desired information about our government's activities.

* Federal bureaus and agencies often operate in shadows (or "penumbras," to use Douglas' murky term).

* Former Speaker of the House Nancy Pelosi pushed Obamacare through the House of Representatives in the dead of night, announcing that Congress would have to pass the law so that we mere citizens could find out what was in it.

* The recently departed Environmental Protection Agency administrator epitomized secretive regulators, using a false identity to cover her tracks.

* The Department of Justice stonewalled and preserved secrecy rather than divulge who was responsible for the deadly "Fast and Furious" gunrunning scheme in Mexico.

* President Obama and former Secretary of State Hillary Clinton kept secret who was responsible for the unconscionable and or incompetent decisions that led to the tragic deaths of four Americans in Benghazi, Libya, last year.

Clearly, the balance between individual privacy and government secrecy is enormously out of whack. Individual privacy continues to shrink, while government secrecy continues to grow.

It was once wisely said (although not by Jefferson, to whom the quote is frequently misattributed):

When governments fear the people, there is liberty. When the people fear the government, there is tyranny.

We will fear the government less and be freer if we can recover our privacy and remove the veil of secrecy from government.

With Gulliver Asleep, the Lilliputians Are Almost Done Smothering the U.S. Economy

Jonathan Swift's classic novel Gulliver's Travels - and in particular the novel's first section in which the tiny Lilliputians succeeded in immobilizing Gulliver by binding him with thousands of their tiny, threadlike ropes - serves as a literary metaphor for today's American economy. While our friends on the left may complain that it is hyperbolic and chauvinistic to describe the American economy as a colossus bestriding the globe, nobody can dispute that it has been the big kid on the block.

Just as Swift's fictitious Lemuel Gulliver's strength wasn't enough to overcome the cumulative effect of myriad tethers, so the American economy's tremendous strength and energy have been progressively overcome and subdued by innumerable government (and its partner in crime, the Federal Reserve) interferences with the market economy. Taken individually, each intervention has been a minor nuisance in the economy; taken collectively, though, they have been subduing the American Gulliver.

The analogy isn't perfect. The tying up of the American Gulliver has been a decades-long, slow motion process. And, of course, the "American economy" isn't a single sentient being, but a composite of several hundred million. What has enabled government to get away with its encroachments is a combination of demagoguery, factionalism, special interest politics, and the fact that most Americans are content if they are getting theirs, and thus being indifferent to encroachments that adversely affect others.

Let's describe government encroachments that have increasingly burdened and enfeebled what historically has been (and still is, for the time being) the world's greatest wealth-creating economy:

* It is impossible to tabulate all the American businesses that have been hamstrung, crippled, or even forced into closure by the oppressive edicts of federal regulatory agencies. We tend to hear about the large corporations that go broke; their sheer size commands national media attention, but countless thousands of smaller businesses have been crippled or crushed by OSHA, the green brigades of FWS, BLM, and the green queen bee, the EPA. In declaring independence from Great Britain, the Founders complained that the British government "has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance." "Swarms" sounds like an accurate characterization of the present American regulatory state run amuck. (Read Wayne Crews' "Ten Thousand Commandments," which estimates the annual cost of federal regulations to be $14,768 per household - apart from the immeasurable but considerable lost production that never took place due to financially prohibitive regulation).

* During the Obama presidency, federal spending has commandeered a record-breaking share of peacetime GDP. In his insightful economic history, Crisis and Leviathan, economist Robert Higgs detailed the "ratchet effect," whereby federal spending soared during national crises (whether wars or depressions) then, after the emergency had passed, federal spending would recede, but never to the pre-crisis level, thus leading to an unbreakable secular trend toward bigger government (i.e., "leviathan"). Has the ratchet effect worked in the aftermath of the Great Recession? Sort of.

Obama's stimulus plan succeeded in raising annual spending from the $3.0 trillion of George W. Bush's last year to $3.5 trillion in 2009 - Obama's misguided attempt to revive the economy via federal "stimulus." Even though the recession officially ended in summer, 2009 - meaning that the extraordinary fiscal "stimulus" could be withdrawn - federal spending never came even halfway back toward pre-crisis levels. It remained at $3.5 trillion in 2010, actually increased to $3.6 trillion in 2011, eased slightly to $3.5 trillion in 2012, and looks likely to hit $3.7 trillion this year. With Obama in the White House, a one-year emergency stimulus paved the way for a permanent major increase in federal spending.

* One last indicator: The number of federal programs that transfer wealth from some Americans to others. I recall that in the mid-1980s, President Reagan charged the Grace Commission with the task of taking an inventory of federal programs. Although the Grace Commission reported that they found it impossible to find out how many people actually worked for the federal government (its scope was too big, sprawling, unmonitored, and murky even in 1985) but they did find 963 programs that provided various forms of financial support to individual recipients.

Alas, the wealth-redistribution activities of the federal government have continued to grow in the nearly three decades since then. In preparing a talk to my college's student body in March, I found 2,199 transfer programs listed on the government website, The Catalog of Federal Domestic Assistance (cfda.gov). Two days later, I double-checked, and was surprised to find that another program had been added during that brief interval, bringing the total to 2200. Surely, that must have been a fluke during this year of sequester and GOP control of the purse strings via their majority in the House of Representatives, right? Alas, no. I updated my talk a week ago, and when I checked cfda.gov, I found that in less than three months, another 32 federal transfer programs had made the list. Surely such a rate is unsustainable, but for federal transfer programs to be cropping up at a rate of almost three per week shows that the federal leviathan continues to gorge and grow, implying continued strong headwinds for the private sector.

Wake up, Gulliver! Or is it already too late?

The View from Londonistan

For the second straight year I've had the pleasure of an extended visit with my daughter in London, and for the second year, the themes of liberty and rights - and how closely related they are to conflict and religion - have been prominent.

Last year, we saw Magna Carta at Salisbury Cathedral. The fact that one not-so-large sheet of parchment changed the trajectory of Western civilization from despotism to liberty is powerful evidence that the pen is ultimately mightier than the sword. (Regarding Magna Carta: the way the copyist managed to write each letter and space each line with a precision indistinguishable from modern print technologies is truly incredible.)

Last week we toured Scotland, and wherever we went, we heard stories of earlier generations of Scottish freedom fighters, saw the castles (including the famous one overlooking Edinburgh from its perch on top of a volcanic upthrust) used to defend against aggressors, and relived the conflicts between different peoples and religions. Then on Memorial Day, on a day trip to Cambridge, we saw the hallowed cemetery where are 3,811 of the approximately 30,000 graves of U.S. airmen who died while flying combat missions out of England in World War II.

Today, the United Kingdom and its values and liberties are under attack again. While we were enjoying Scotland's beauty, Drummer Lee Rigby was butchered in broad daylight on the streets of London by two fanatical Islamists. We had heard about it from a taxi driver in Edinburgh, but when it really hit home for me was after we got back to London and I saw his wedding photo in one of the newspapers. The young man was one of the kindest, gentlest, most cherubic looking men I have seen in a long time, and the image of his bride gave the same impression. That such a man could be treated so brutally, such a family be devastated so wantonly, is evil of uncommon magnitude.

While walking to the Lords Cricket Club to share a Sunday roast with an old prep school chum, we passed one of London's largest mosques and a number of Muslims on the sidewalk. It's easy to see why some wag coined the word "Londonistan." The tension and mutual mistrust were palpable. It feels like London is under siege. The mosque seems like a beachhead of an invading force. As was the case here centuries ago, a religious war threatens to rob merry olde England of its tranquility. Londoners find themselves potential targets of random attacks by guerrilla jihadists dwelling in their neighborhoods.

In the anguished aftermath of Lee Rigby's murder, Londoners yearned mightily for solutions to the grim threat they feel. The problem is, there are no easy answers, only vexing dilemmas and uncomfortable tradeoffs.

In a land that values free speech, there are proposals to censor jihadist websites and suppress hate speech - understandable and in many ways justifiable - but such suggestions are accompanied by the nagging feelings that enforcing such objectives could lead to abuses and that driving jihadists underground may not be sufficient to prevent future guerrilla attacks.

In a country where one of the finest historical achievements was learning to set aside sectarian differences, agree to disagree about religion, but coexist peacefully in a civil society based on the impartial protection of individual rights, few citizens want their country to be divided by religious strife. Religious tolerance was achieved at great cost by earlier generations of Brits, but how viable is tolerance if a core tenet of one religion is intolerance of anyone outside the faith? How can Christian England avoid religious strife, when adherents of one particular religion are thrusting it upon them?

And how safe and practical is it to cling to the belief that it is wrong and bigoted to look at individual members of some "other group" as being potentially dangerous? The current situation is horribly unfair to Muslims who have assimilated into Western culture and share our belief in religious tolerance and the separation of church and state, but the insurmountable problem is: How are we non-Muslims to know which Muslims are ticking time bombs waiting to explode?

I wonder whether Britons fully realize the nature of the conflict in which they are engaged. What drives Islamism is a religious belief system. The fanatics are moved by what they perceive as a higher purpose. They have the conviction that faith in divine law imparts, and the concomitant willingness to die in the service of that cause.

It seems to me, although I'm sure many in the West will disagree, that only a comparable belief system of religious faith, with its devotion to a purpose that transcends temporal and temporary happiness, can withstand and prevail against a fervent political-religious ideology. Somehow, I doubt that secular humanism or the facile belief that "nice people don't butcher or seek to enslave others" won't cut it against a rabid, unreasoning, uncompromising, to-the-death fanaticism.

There are visible clues about the antidote to illiberal, atavistic ideology of Islamic conquest all over London and the British isles. I refer to the ubiquitous beautiful churches and magnificent, sometimes centuries-old cathedrals. (Speaking of cathedrals, Salisbury Cathedral, which dates from the 13th century and houses Magna Carta, would be worth a visit even if Magna Carta were elsewhere.) The architectural majesty of these hallowed buildings puts to shame the uninspiring utilitarian structures of the modern era.

Britain's grand and gorgeous Christian churches are monuments in stone to grand and enduring ideas. They remind us that, in spite of manifold sins and shortcomings on the part of fallible individual Christians, it has been Christian values and concepts that gave birth to our love of freedom, our respect for individual rights, the search for and discovery of the principles governing nature, and even our free market system, based as it essentially is on the Golden Rule whereby one profits to the extent of providing value to others. It was the genius of Christianity that taught us to live and let live, to tolerate others, to peacefully coexist in our economic and social lives even as we go our separate ways on the Sabbath to observe different religious traditions, or no tradition. These have been the happy and prosperous fruits of Christian culture. Many in our Western societies, having achieved material abundance, have had less time for religion in recent decades. England's churches, like the ones on the European continent and like many at home in the States, are largely empty. We have forgotten what made us what we are. Indeed, we have the right to abandon our cultural roots and forsake the teachings that lifted us above life that was nasty, brutish, and short. I strongly suspect, though, that the cost of doing so will be great, and, conversely, that a return to our roots will strengthen us for the struggle ahead. *