29 October 2008

Free Speech at Fredonia State

The Objectivist
Dunkirk-Fredonia Observer
October 23, 2008

On Tuesday, October 7, 2008 in front of Reed Library, a father-daughter team (Jim and Michelle Deferio) came to argue for their Christian views, among them that God condemns homosexual acts and that they are wrong. The campus response showed the degree to which the campus left will bully their opponents and the administration and faculty will tolerate the bullying. I should disclose that a few years ago I was in a free-speech battle at Fredonia State.

The campus response to these speakers was a case study in liberal paranoia. First, according to the Fredonia State student paper, The Leader, around 1,500 people rallied to protest the speakers’ message. Later in the day, they in effect shut down access to the speaker, Jim Deferio. By the time I got there, protestors had partially encircled Deferio with a large white sheet so that most of the audience, who were gathered on the library stairs, could not see him. In addition, there was drumming and chanting that was so loud that it was very difficult to hear what he had to say. At least when I was there, they thus made it difficult to see him and nearly impossible to hear him. Music professor, Kay Stonefelt, took credit for organizing the student drum circle (“an endless beat to the mantra of peace”) and presumably for drowning out Deferio’s voice.

Despite the fact that the speaker was partially encircled and drowned out by sound, the University Police Chief Anne Burns refused to allow him to use sound amplification devices (for example, a megaphone) to get out his message. I don’t know whether the ban on such devices is part of a pre-existing rule. The Leader decided not to cover what the Deferios said. Apparently, the speakers’ argument was simply too dangerous and upsetting to allow the campus community to consider it.

Campus administrators, faculty, and staff seemed to condone much of the protestors’ behavior. According to The Leader, the night before the speakers arrived at campus, Monica White, Assistant Vice President for Student Affairs, met with Student Association representatives and the leaders of student groups, including the pro-gay Pride Alliance and other multi-cultural groups. Earlier in the week, Vice President for Student Affairs, David Herman, gathered information on the speakers and later expressed concern about the “tone of the message and how disruptive it might be.” On the day of the protests, he provided hourly reports to Fredonia State’s President, Dennis Hefner. Five of the university’s fourteen police officers monitored the speakers and protestors. In response to the speakers, The Leader reported that University Counseling Center staff were on-site to “provide help for students who were visibly shaken and disturbed.” After the visit by the Deferios, President Hefner and around 350 attendees met that night at the campus Peace Pole for a moment of silence and then sang “Amazing Grace.”

There are a number of disturbing features about these events. First, there is the issue of whether the protestors interfered with the speakers’ Constitutional right of free speech. While the Deferios were allowed to talk, the partial encirclement by a large white sheet was probably near the legal line in terms of interfering with their speech. Had they completely encircled them with the sheet, this would have interfered with their rights and significant encirclement is close to complete encirclement.

Second, even if the protestors’ actions did not violate the speakers’ right of free speech, it still was a case of a campus allowing protestors to silence one viewpoint with behavior that would never be tolerated if it were used to silence other viewpoints. The campus would never tolerate racist students and faculty using large sheets and drums to lessen access to black speakers, particularly if this was done all semester. A similar thing is true if Christian groups engaged in similar behavior in or order to silence leftist administrators. Allowing message-disrupting acts when they shut down some ideas but not others is viewpoint discrimination and the law takes a dim view of it.

Third, the campus might have shut down the community’s consideration of a sound argument. I saw them only briefly, but as best I can determine from discussions with students who were there, and I have no way of checking their accuracy, here was one of the speakers’ arguments.

1. If someone is Christian, then he should follow the Bible.
2. If someone should follow the Bible, then he should not have gay sex.
3. Hence, if someone is Christian, then he should not have gay sex.

I take it that the first claim is straightforward. The second is more complex. The Bible addresses gay sex in a number of places. From Leviticus 18:22, “You shall not lie with a male as with a woman; it is an abomination.” From Romans 1:26-27, “For this reason God gave them up to dishonorable passions. Their women exchanged natural relations for unnatural, and the men likewise gave up natural relations with women and were consumed with passion for one another, men committing shameless acts with men and receiving in their own persons the due penalty for their error.” See also, Corinthians 1: 9 and Timothy 1: 8-10.

Discussion of the speakers’ ideas might lead one to reason as follows: the argument is sound and because we independently know that gay sex is permissible, Christianity is false. Alternatively, discussion of this argument might have led to interesting discussions of how to interpret the Bible. For example, perhaps one should reject the literal text and look for the original intent behind the passages. Here the issue arises whether the intent is that of God or human authors. Alternatively, perhaps one should figure out what morality independently requires and use this knowledge to decide which parts of the Bible should be deemphasized or ignored. Note that this comes perilously close to rejecting the notion that if someone is a Christian, then he should follow the Bible.

As John Stuart Mill in his classic work, On Liberty (1859), pointed out, there is value in discussing unpopular ideas. By discussing unpopular ideas, people sometimes learn the conventional wisdom is false, that conventional wisdom is partially false, or the best reasons to accept the conventional wisdom rather than merely repeating it in a child-like manner. This last point is particularly relevant given that this argument is probably accepted by many Americans. None of these gains were possible in this case because of the crowd’s refusal to let people consider the speakers’ ideas.

Fourth, this incident points out that the campus views its students as children. The presence of counselors to care for psychologically injured protestors and the administration’s advance meetings with gay and other groups suggests a view of the students as too pure and delicate to face opposing views. The Leader compounded this view by deciding not to cover their message. This infantilization shortchanges students.

Fear of ideas different from the campus liberal orthodoxy is no excuse for closing down the marketplace of ideas.

24 October 2008

Brother, Can You Spare 15 Minutes?

To help out some NYU researchers by filling out their survey? And post the link (with comments closed) on your blog? Please don't do anything to bias the survey results...thanks!

15 October 2008

Bank Bailout #1

The Objectivist
Dunkirk-Fredonia Observer
October 4, 2008

On Friday, October 3, 2008, the U.S. passed the Emergency Economic Stabilization Act of 2008. This $700 billion bailout authorizes the Secretary of the Treasury to spend up this amount to purchase mortgage-based securities from U.S. banks. This is an attempt to reduce the banks’ losses. According to the plan, the U.S. government will buy the securities and in return receive the mortgage payments and eventually be able to sell the securities. The maximum cost of the plan is roughly $4,635 per income-tax paying citizen ($700 billion divided by 151 million working Americans), although this figure assumes that the purchased real estate will eventually have no value and it won’t. The Bush administration convinced Congress that the plan will keep the credit market healthy and thereby ensure that consumers and businesses can continue to get credit. If the plan wasn’t enacted, the Bush administration argued, the loans would dry up and the economy would collapse.

The problem here is that housing prices are declining after being grossly inflated. As a result, people are not making their housing payments. There is also widespread uncertainty about how high many defaults and foreclosures will go. A foreclosure occurs when the lender takes over the house that was used as collateral for the loan.

In the long term, this plan will hurt the economy. First, we don’t need the plan because we are not heading over the financial cliff. Alan Reynolds of the Cato Institute points out that the U.S. economy is still growing (the real gross domestic product is up). It should be noted that there are some warning signs. The gross domestic products of France, Germany, Japan, and Hong Kong are declining. More ominously, the Dow Jones Industrial Average did drop 31% as of this past Tuesday (10/14/08). Still, this is nothing like the almost 90% drop in stock prices that occurred in July 1932. It is also worth noting that there have been 10 previous drops in the stock market (defined as at least a 20% decline in the Standard & Poor 500). Columnist Robert Samuelson points out that this includes nearly 50% drops in 1973-1974 and 2000-2002.

Reynolds also points out that bank and consumer loans are up. In fact, consumer loans are growing at the fastest rate since 2004. That is not a typo. Consumer and industrial loans are up. While giant banks have cut back on their loans, smaller banks have stepped into the breach. Reynolds points out that even loans between banks, a major concern for the bailout proponents, have only dipped modestly and in any case are very small in comparison to consumer and business loans. Even the interest rate on these loans as recently as September 30, 2008 was not out of the range of such loans in the last year.

The concern over bank failures is also premature. As of less than a week ago (September 29, 2008), there were little more than a dozen bank failures compared to more than 5,000 in the 1930s (The Great Depression) and 3,000 in the 1980s (The Savings & Loan Crisis). Where several major financial institutions have failed (Washington Mutual, Wachovia, Bear-Stearns, Lehman Brothers, and AIG), the Federal Reserve and Federal Deposit Insurance Corporation have handled the situation. The recent drop in the Dow Jones Industrial Average is distinct from bank failures.

Second, the taxpayer money that is to be used to purchase the housing loans (that is, mortgage-based securities) must come from higher taxes or loans. Because the market almost always puts the money to better use than the government, higher taxes will result in U.S. dollars being put in to less efficient use. This problem will intensify once politicians start to trade security purchases for campaign contributions and other benefits. This in turn will reduce economic growth rates. Daniel Mitchell points out that lowered growth rates have significant effects over the long term because of compounding. The slightly higher growth rates in the U.S. as compared to our competitors explain why U.S. citizens make more money than French, German, and Japanese citizens. If the money is used for loans, then the government is taking out one loan to pay off another. Again this directs resources to less efficient uses and ratchets up the debt. Skyrocketing debt is in fact one of the legacies of the Bush administration. Joseph Stiglitz, a Nobel Prize winning economist, points out that in the last eight years the debt has increased by 58% (32% when you adjust for inflation) and by an astounding $3.3 trillion. In 2008 and 2009, the deficit will likely reach record heights.

Third, the plan’s particulars are atrocious. The government will need to decide what to pay for the mortgage-backed securities. Stiglitz points out that the banks will likely get the government to pay way too much for the worst mortgages. If the government paid fair market value for these terrible loans, then the banks would still have a crippling balance sheet and the credit problem would remain. So the system depends on the banks gaming the system. In addition, housing prices are generally expected to keep on dropping. If the government buys mortgages at the current price and the prices keep on dropping, then it will be buying high and selling low, thereby hosing the taxpayers and artificially propping up housing prices.

It is worth noting that the government, not deregulation or greed, caused the mess that led to this bailout. This claim rests on two premises.

1. The government forced banks to lend to people who were poor credit risks.

2. The collapse of the mortgage market is in large part due to these people defaulting on their loans.

The first premise is uncontroversial. As Russell Roberts, an economics professor writing in the Wall Street Journal, points out, beginning in 1992 Congress pushed private-public mortgage giants, Fannie Mae and Freddie Mac, to buy more mortgages going to low and moderate income people. By 2005, the Department of Housing and Urban Development required that 22% of their mortgage purchases go to such people. In doing so, it thereby funded hundreds of billions of dollars of such loans, many of them subprime and adjustable-rate loans. In 1977, Congress passed the Community Reinvestment Act, which pressured traditional banks to lend to poor and moderate income people. In 1995 this act was strengthened and it caused an 80% increase in loans to such people. These acts along with the increased capital-gains exclusion on real estate and lowered interest rates jacked up the housing market. The average price of a house doubled from 1997 to 2005 (in contrast, inflation increased by 22%). The current default problem is due in no small part to the failure of people who were poor credit risks to pay the subprime loans and to handle vastly inflated housing prices.

Members of Congress and the White House did this initially to redistribute wealth to the poor without having to raise taxes and later in exchange for campaign money. David Boaz points out that in the last decade, Fannie and Freddie spent $170 million on lobbying, including giving $16 million to members of Congress and $10 million in soft money to the Democratic and Republican Parties. Consider the leading recipients of Fannie and Freddie campaign contributions: Sen. Chris Dodd (D-CT) (chairman of the Senate Banking Committee), Sen. John Kerry (D-MA), Sen. Barack Obama (D-IL), and Sen. Hillary Clinton (D-NY). In addition to Dodd, Rep. Barney Frank (D-MA) is the other leading villain. He helped to block any attempt to rein in Fannie and Freddie. Ideology and campaign dollars led Congress to reject the strenuous warnings and requests by the Clinton Treasury Secretary Lawrence Summers, Federal Reserve Chairman Alan Greenspan, and the Bush Administration to fix Fannie and Freddie by increasing their capital requirements, shrinking their number of risky assets, and adopting sound accounting practices.

This bill will make things worse and was brought about by corruption and leftist ideology in Congress and the White House. Every aspect of it stinks to hell.

01 October 2008

Election #2: Trumpeting One's Own Virtue

The Objectivist
Dunkirk-Fredonia Observer
September 7, 2008

John McCain and his supporters think that his war-hero status provides a strong reason for voters to choose him to be President. This argument is repeated by his many supporters. In McCain’s acceptance speech, six paragraphs at the culmination of his speech focused on his wartime service. Similar emphasis at the Republican nominating convention was given by former New York City Mayor Rudolf Giuliani and Vice Presidential nominee, Alaska Gov. Sarah Palin.

In 1967, on his 23rd bombing mission in Vietnam, McCain was shot down by a missile over Hanoi. The crash fractured both arms and a leg. When the North Vietnamese captured him, they crushed his shoulder with a rifle and bayoneted him. He was beaten and interrogated, but later given medical care when the North Vietnamese learned who his father was. He was then kept a prisoner from 1967 to 1973. In 1968, McCain’s father became the commander of all U.S. forces in the Vietnam theater. For propaganda purposes, the North Vietnamese offered McCain early release. He refused the offer of release, insisting that he could accept it only if all the persons captured before him were released first. In 1968, his captors tortured McCain, subjecting him to beatings and rope bindings. During this time, he also suffered dysentery. He attempted suicide, but was stopped by the Vietnamese prison guards. The North Vietnamese eventually broke him and he gave a meaningless propaganda “confession” that said "I am a black criminal and I have performed the deeds of an air pirate. I almost died and the Vietnamese people saved my life, thanks to the doctors."

Being broken was common among the tortured POWs. Besides flying bombing missions, something shared by other Vietnam-era pilots, McCain’s claim to hero status apparently rests on his refusing early release and not cooperating with his captors.

One reason the war-hero argument is unsound is that there is no correlation between being a war hero and being a good President. The standard left-wing list of great Presidents includes people like Thomas Jefferson, Abraham Lincoln, and Franklin Delano Roosevelt, none of whom saw combat. Lincoln was in the military but did not see action. For those who think the government should leave its citizens alone, Presidents Calvin Coolidge and Ronald Reagan also didn’t see combat and were arguably excellent.

Recent Presidents who were in the military include such mediocrities as George H. W. Bush (who squandered Reagan’s legacy) and terrible Presidents like Richard Nixon (corruption) and Jimmy Carter (an abject failure on both economic and foreign-policy fronts). Our recent history, then, suggests that military service does not provide a good indication of whether a candidate will be a successful President.

The second reason to think that McCain’s war-hero status is irrelevant is that it is probably relevant only as an indicator of integrity or courage. However, here there is more direct evidence on McCain’s integrity and it is not good. In 1989, the Senate Ethics Committee found that McCain exercised poor judgment when he interfered with the Federal Home Loan Bank Board (FHLBB) in their investigation of failed Lincoln Savings and Loan Association and its chairman, Charles Keating. In 1987, McCain and four other Senators pressured the federal regulators to ease up on the bank. In 1989, the FHLBB seized control of Lincoln and more than 21,000 investors, mostly elderly, lost their life savings. When it seized Lincoln, the federal government also had to assume $2 billion in debt. It is not clear how much, if any, of these losses could have been avoided if the Senators had not pressured regulators. Not only did McCain get over $100,000 in campaign contributions from Keating, but his wife and father-in-law invested in a Keating business, and McCain and his family took nine trips at Keating’s expense, including vacations to Keating’s Bahamas retreat. Unlike McCain and a fellow tarnished hero, former astronaut John Glenn (D-OH), the other members of the Keating Five had the decency not to run again.

Also, McCain is a known adulterer, who has admitted that he treated his first wife poorly. Normally this would not be the voters’ business, but McCain raised the issue when he repeatedly trumpeting his virtue on the basis of what he did in his early 30s (he is now 72).

Third, voting for candidates who run on their biography sets a bad precedent. A heroic biography is no substitute for clear guidelines on what a candidate hopes to accomplish once in office. McCain is running on his biography rather than issues. He previously opposed Bush’s tax cuts, but now supports them. He flip flopped on offshore drilling and still opposes drilling in the Alaska National Wildlife Preserve (ANWR). Why the U.S. should allow drilling offshore but not ANWR remains a mystery. He previously supported amnesty for 12-20 million largely poor and unskilled illegal aliens, but now doesn’t discuss it. He claims to support Supreme Court Justices similar to Scalia and Thomas, yet helped protect the Democrats’ ability to block such judicial candidates. It is widely reported that his advisors had a hard time talking him out of selecting Sen. Joe Lieberman (D-CT) to be his running mate, despite the fact that Lieberman is a tax-and-spend liberal. For example, in 2007 the National Taxpayers Union gave Lieberman an 11% rating, that is, an F. This leads the voter to wonder whether he is for or against tax cuts, off-shore and ANWR drilling, amnesty for illegal aliens, smaller government, and doing what it takes to appoint conservative justices.

The war-hero argument raises a separate issue, which is whether citizens should be extraordinarily grateful to those who fight foreign enemies. This country no longer makes people work in the military if they don’t want to. Like teachers, farmers, or police officers, military jobs come with a package of benefits and risks. Compared to most jobs, it is more exciting, allows for travel, job security, and exercise, and, on some accounts, improves dating and marriage prospects. Persons who enter the military via the academies get paid to receive a world-class education and often have a bright future with the military. The downside of the job is that it carries the risk that war will come and they will have to fight. Do the benefits outweigh the risks? The answer depends on the individual. If someone takes the deal because he judges it to be better than other jobs, it is hard to see why we should be grateful to him. If someone didn’t like the mix of benefits and risks, he could have done something else or held out for a better deal. The notion of overwhelming national gratitude accompanies the McCain war-hero argument, just as it did four years ago when John Kerry trumpeted his war-hero status.

John McCain is running heavily on what he did more than thirty years ago in Vietnam. History provides little evidence that being a war hero correlates with being a good President. If it is offered as evidence for McCain’s integrity, we have more direct evidence and it does not bode well for him. Voting for McCain also encourages biography-based campaigns. Even the separate claim that we should be grateful to McCain or other veterans is unclear. Sadly, despite the war-hero focus and the lack of clarity about what he will do, McCain is still a far better choice than Obama.