This is the Citizen Reagan podcast and I need to get in the habit of doing a few things with every episode, like asking you to rate and review the podcast with whatever services you use. Like asking you to share us with your friends, family, complete strangers and your worst enemies, I don’t care really, just as long as you share it. Like telling you that you can find past episodes, transcripts, research and more on a wiki on my webspace. The address for the wiki is www.poorrichardsprintshop.com/wiki but if you just visit poorrichardsprintshop.com, I have a variety of other projects there. I sell digitally restored books, magazines and pamphlets. I have constructed an archive of old pulp short stories. I accept donations through Ko-fi, if you're willing help out. It’s all there on the website. Now, with that out of the way, let's get to Reagan.

Welcome again, I hope, to my third episode looking at the 1999 edition of the book, The Incredible Bread Machine. If this is your first time listening, this might not be the best place to pick up. Usually, my episodes are pretty self-contained, but you are now half way through what will be a 5-episode series. You may want to go back a couple weeks to start from the beginning, or maybe even go to episode 1, to get a feel for what this podcast is about.

Today, we're looking at Part 3 of the book, entitled The Principles Ignored—How Political Force Disrupts Our Lives.

The first chapter in this section is, The Death of Diana and no, they are not talking about a princess. We are going to hear the story of Diana Oughton and the radicalism of the 1960s which she was involved with. R.W. Grant, our author, asks, as he did once before regarding Radical Pique, how so many reasonable, intelligent people can get things so wrong. If you remember, in the Radical Pique discussion, his belief is that the intellectuals believe themselves to know the answers to our problems, rather than just allowing market forces to sort things out on it’s own.

Diana Oughton, born to a wealthy family in 1934 Dwight Illinois, attended public school before going to an exclusive, all-girls college prep school in Virginia and the equally exclusive Bryn Mawr Women’s College in Philadelphia. It is here that her political shift began. Grant writes of her final year and a reading tutoring program she joined to assist black children in Philadelphia, but it may have begun earlier, with her junior year spent studying in Germany, at least if you want to believe Wikipedia. This tutoring work gave her a perspective of the country she’d not expected, as she found herself with 7th graders who were incapable of reading. After graduating, she joined an international assistance group and was sent to Guatemala, where she worked for 2 years. She saw a rich few keeping the poor from advancing, and she connected it with a United States government which was involved, and not in a good way. Grant pauses for a moment here to point out that, "there's a difference between the political capitalism of gunboats and puppet dictators and the private capitalism of the marketplace." The distinction was lost on Diana, who returned to the United States a radical socialist.

Diana would join SDS, Students for a Democratic Society, a student-oriented offshoot of the League for Industrial Democracy which had founded under the name Intercollegiate Socialist Society. On a side note, a couple of the pamphlets I have digitally restored are connected with these organizations. I'll provide links if you visit the wiki. [Handbook of the Student League of Industrial Democracy]
[Study Courses in Socialism]

But the SDS wasn’t radical enough. Diana would fall in with a more destructive splinter group: The Weatherman. She and this group continued to become more radical at their collectives in Michigan. A failed "Days of Rage" demonstration led to the group's shrinkage and eventual change of tactics. It was time for guerrilla warfare in the United States. Diana would end up with a cell in New York. On March 6, 1970, while constructing bombs, someone made a mistake. Diana and 2 others were killed.

Now, what are we to get from this lengthy story? Why did Grant take us this direction? As we said, he seems to question why smart people would not see the value of the market. Diana, along with many of these youth radicals, came from middle-class or better families. Perhaps, Grant speculates, there is some truth to the rule that people do not value what they do not earn. In this case, they actually develop a hatred for this wealth and by extension, all wealth. He also notes the fact that these radicals also had a high level of education. Had she not gained an understanding of the, quote, "connection between economic freedom and material progress," unquote.

Something else Diana shows is altruism and the twisted morality that grew from it. She was able to justify murder as acceptable as part of the way to solve, what, the problem of the poor?

Finally, allowing a transition to the next chapter, Grant says that the real enemy of the poor is not capitalism, but the idea of using political force to solve problems.

Peru's 1968 foray into socialism caused money to flee the country. Price controls made farming unprofitable and production dropped. Peru, which had been self-sufficient regarding its food supply since the time of the Incas, found itself needing to import food. Did capitalism cause this?

Throughout the third-world, countries are run by socialists of one stripe or another and bureaucracy makes investment laughable. State-run universities put more emphasis on those disciplines that feed the bureaucracy, not agriculture or the sciences. And the United States, through foreign aid, has subsidized it. Money going into Russia seldom reaches the people, rather it ends up with corrupt officials and oligarchs with Swiss bank accounts.

The United States has shifted away from private capitalism, that is, capitalism based on voluntary exchange, to political capitalism, where the government directs money, sometimes indirectly, to groups it favors. As a consequence, there are those who are not able to engage and suffer as a result.

Rosemary Furman, a legal secretary in Jacksonville Florida, offered a low cost service by creating DIY legal forms for some common legal events like divorces, adoptions or wills. She undercut normal costs for these documents by a factor of 6. However, she had no legal education, so the Florida Bar Association filed suit, claiming she was practicing law without a license. It went to the Supreme Court and she lost, and so did the people that depended on her, the poor who couldn't afford normal lawyer's fees. However, her actions pushed the Florida Bar to make some changes.

Likewise, a variety of other occupations use government regulations to protect their high-cost services from being performed by others. California midwives who cannot help those that cannot go to expensive hospitals. Druggists work to prevent mail-order suppliers (you can tell this was written before the Internet). Optometrists, teachers, dentists, barbers all benefit from state-enforced monopolies due to education and licensing.

Next stop, taxes. Grant discusses how the poor are hit hardest by all taxes. Reagan talked about taxes (not necessarily their impact on the poor) in a broadcast I covered a few months ago, discussing how corporate taxes are just passed along to the consumer, rich and poor alike, in their prices. Government regulation can have a similar effect and mentions another of our old friends, Dr. Murray Weidenbaum, who once estimated the added cost to the consumer of regulation, ran around $2200 per year for a family of four. So, who does benefit?? Montgomery County Maryland and Fairfax County Virginia, two of the richest counties in the United States and I'm sure it's just a coincidence that they are neighbors with the nation's capital.

The United States used to be a place of upward mobility. Where a Cornelius Vanderbilt could build a vast shipping and railroad empire. Few make it to that level, but there are still thousands who had a dream, took their lumps and created a business. But that was then. This is now and there are "rules, regulations, inspections, restrictions, orders, decrees, taxes, licenses, fees, uncertainties and red tape" which make starting a business so much more difficult.

You can't start a driveway paving business, like Leroy Barrett of Los Angeles tried to do. He had no contractor's license, so he ended up in court, fined, threatened with jail time if he continued.

Or, consider the possibility of becoming a barber. What does it take? A little practice, some hair clippers and customers? Nope, not in California. You need a license from the Board of Barber Examiners. To get this you need two years as an apprentice or 1500 hours of training at a state school costing $3500. $50 for the state test. $50 for the license, which needs to be renewed in two years. $50 for shop inspection and approval. $106 for a city business license if you're working in Los Angeles. Then there are the routine inspections from that Board of Barber Examiners, the city Health Department. Oh, and of course, your taxes. If you hire someone, anyone, you've got deductions, contributions, fees, Worker's Compensation, unemployment insurance, the employee training tax, Federal unemployment, state disability insurance, state withholding tax, federal withholding tax, social security, medicare, and it all requires paperwork.

Cosmetology is in the same boat, though their training is 1600 hours for $9000.

Want to operate a taxi in New York? The permit, called a medallion, costs around $160,000. Remember, this book was written in 1999. The price has changed quite a bit since the invention of ride-sharing. It was quite high. It has now dropped.

Every business has them. They are called barriers to entry. In some cases, the government involved looks at them as a way to make money without raising taxes, though in the case of the taxi medallions, it is specifically to limit the supply. To the poor, often under-educated and under experienced, these barriers are almost insurmountable. Those who are intrenched are insulated from the competition. Those who do not, are stuck.

Government thinks it's helping, but doesn't realize when it is doing more harm than good. Grant outlines the difficulty of eviction in L.A. It is often easier to pay a renter over $1000 to leave than to spend thousands more going through the courts. This situation makes landlords much more cautious about who they rent to and the honest, but down-on-their-luck renter gets caught in the middle. Sometimes, landlords get caught in a situation where a person pays, but the landlord wants them out, like drug dealers. With both situations, a building or a neighborhood begins to spiral downward and a landlord may just call it quits.

Grant next turns to a discussion of rent control. I touched on the subject briefly when talking about supply and demand in a previous episode. On its surface, rent controls may seem like they would benefit the poor, but far too often, they end up helping the middle and upper classes, leaving the poor in the dust. New York mayor Ed Koch held the lease on a Greenwich Village rent controlled property for at least 21 years. He was saving an estimated $1350 per month by doing so. In a more recent example not in the book, former Congressman Charlie Rangel has (or had in 2009) control of 4 rent-controlled apartments in Harlem. 3 were combined into a 2500 square foot living space, while the 4th was being improperly used as a campaign office. He was paying almost $5000 per month less than the going rate in the building.

In fact, since landlords may choose to increase the rent on their non-controlled properties to make up for any loss, this actually hurts everyone else. Another factor to consider is that rising costs for the property owner makes it more difficult for them to maintain the property. The result is substandard living and may lead to their being abandoned. Grant states that in 40 years of rent control in New York City, 300,000 properties were abandoned, while the city shells out $300 million per year in aid to the homeless.

If New York City created a problem for itself, the People's Republic of Santa Monica, as Grant calls it, was a disaster. Santa Monica put in place some of the strongest rent-control policies in the nation in 1979, reacting to rising rental fees. What was causing the rise in rent?? What was going on, oh, yes, a nationwide malaise, which included inflation. I don’t suppose I need to go into all the details about how the campaign to implement rent controls got started, but I will say Jane Fonda's husband at the time was involved.

Once put in place, everyone lived happily ever after, good night everybody!

Who am I kidding? Santa Monica has (or had at the time the book was written) a wild rental scene. Thanks to rent control, it was cheaper to rent some apartments than to rent a garage near the beach. The rent controls created a permanent seller's market so aggressive there was no need to advertise. Checking for rentals didn't mean a look at the newspaper, it meant driving around looking for moving trucks or painting crews. It would be the more affluent professional who was in the best position to hunt down the best properties. Grant, quoting another book, Middle Class Radicalism in Santa Monica, indicates sometimes these professionals might pay off renters to move out. The difficulty of rising maintenance costs reared its ugly head here too, except this time, the government board responsible for rent control put its foot down. Landlords would see their rent decreased for failing to maintain their properties. This wasn't close to the end of the government meddling. Landlords would make a move to escape, officials would block it. Convert to condos? Outlawed. Complete teardown to build some other kind of structure? Outlawed. Teardowns were only allowed to be replaced by another apartment building with the same number of units. The state legislature stepped in and fixed that one. Every loophole closed, but the flaws of rent control remained and the poor continued to get shut out. If you, as a landlord, have hundreds of people wanting to rent, are you going to rent to someone that might not be able to pay or someone that will?

Thankfully, again, the state legislature of California stepped in and relieved the issue. Yes, that sounds crazy to me too, that the state legislature is the sane one in the conversation, allowing for modest rent increases when renters left.

As we wrap up the chapter, we have a quote from a city staff member: "We support maximum citizen neighborhood involvement in the process, but we would never recommend releasing the decision making part to the neighborhood or providing them with veto control." Yeah, ok. That seems to sum up things nicely.

Rent control is a form of extortion. Rent at our price, not yours or else you’ll not rent at all. Just because the extortion is done by the hands of a government entity doesn’t make it right.

The next topic Grant covers is Big Labor. Are unions, as many claim, responsible for the growth of the middle class or the increase in our standard of living? Well, if we look at the decades before unions appeared, there was growth in both. If we look at the time during the decades of decline in union membership, there was growth in both. The correlation doesn't seem to hold up. Did unions have an important place in history, especially early on? Yes, absolutely. I believe that long before I read this book, but their time has passed.

Do unions help the poor? No, not really. Capitalism creates new wealth, unions redirect it from one group to another, like themselves. Those on the short end are not the business owners they are demanding higher salaries or benefits from, they can just raise their prices. No, it's those that can't afford the now more expensive products and those who don’t have the experience to get into a job they may desperately need.

This sounds familiar, wasn't I just talking about jobs and experience a few weeks ago? Yes. Minimum wages! Grant provides more ammunition against the minimum wage. A Democratic governor of Massachusetts in the 1930s, was pushing to reduce the advantage Southern states had with their lower wages. "Massachusetts would have equal competition with other sections of the country, thus affording labor and industry of Massachusetts some degree of assurance that our present industries will not move out of the state." Protecting union jobs, protecting, if I may be so bold, white jobs.

Grant goes there. The Davis-Bacon Act, which forces government-contracted construction to pay prevailing (i.e. union) wages. This effectively priced less-skilled, non-union black workers out of the jobs. During debate on the bill, Democrat Congressmen John Cochran and Clayton Allgood specifically complained about black workers and their anti-competitive acts of taking less wages.

Unions also gum up the works for management. How many people does it take to play a song on the radio? Depends on if there are unions involved. Radio broadcaster Glenn Beck tells a story of going to New York's WNBC and watching as 3 people did the job he was used to doing alone. As he tells it, in the 1950s, when WNBC stopped using a live orchestra, they made a deal with the musician's union who protested that they'd put their members out of jobs. The compromise was to make the union responsible for placing the record on the turntable. Likewise, a technician from another union was responsible for handling the equipment. He would place the needle on the record. That’s two. The third was the DJ himself, making the pointing motion to cue the technician to drop the needle.

How did we get to this point? Unions were formed in reaction to worker exploitation. As I said before, they had their place in the beginning. Unions, at first, had, nor needed any assistance from the government. However, as unions grew, they became powerful and power is something every politician wants to get cozy with. An implicit quid pro quo formed. Laws were passed which helped the unions strengthen their position against business. Grant specifically outlines the effects of the Norris-LaGuardia Act and the Wagner Act (which created the NLRB, National Labor Relations Board). Norris-LaGuardia made it harder for the courts to intervene in favor of businesses. Wagner made collective bargaining compulsory and tipped many more scales in favor of the unions. Unions may act in ways a business may not. If a union solicits a strike, that's fine. If a business solicits against one, that's unfair, so sayeth the NLRB. If a union threatens to shut down a business, fair game. If a business shuts down rather than deal with the union, that's unfair. If a union does it, it's probably fine. If the business does the same thing, that's an unfair labor practice. Grant runs down a lengthy list, some actual events with footnotes.

Wagner has been amended a couple times, but not sufficiently and the damage has been done. The laws should be repealed and the NLRB disbanded. As I discussed in the minimum wage podcast episode a few weeks ago, employment is a negotiation between two entities: A worker and a business owner. If the either side doesn't like the terms, they walk away from the deal. If they agree initially, but change over time, either side should have the freedom to sever their ties. The New York City public school system should eliminate its rubber rooms and fire those employees it has been forced to keep in them. This is me talking, not the book. The teacher's union in the Big Apple has made firing so difficult it's cheaper to pay the teachers not to teach. These are teachers charged with all manner of improprieties, who needed to be pulled out of classrooms.

Next chapter: The War on Drugs. Again, Grant puts the problem squarely on political intervention and that political intervention came as the result of an anti-Chinese sentiment in the late 1800s, particularly surrounding the practice of smoking opium. The first anti-drug laws were to prohibit the smoking and manufacture of opium, except that the prohibitions were against Chinese in America. In a similar way, cocaine became associated with blacks in the South. Marijuana, in the 1930s, was associated with Mexican-Americans. But, our American "drugs" of alcohol and tobacco are perfectly acceptable.

Regardless of the origin of the current drug laws, have they really had an impact or have they caused more trouble? The potential of profit from the illegal drug trade almost guarantees there will be suppliers, and how much of that profit feeds into other illegal activities? What has been the cost in policing, adjudication, jailing? What is the human toll from street violence and tainted drugs coming from questionable sources? How much has it fed into police corruption? Has it worked to destroy the plants at their sources in other countries, typically 3rd World ones? A non-book observation: 20 years in Afghanistan, we haven't replaced the poppy fields with apple orchards or any other crops that could make them another bread basket of Asia.

So, how far? How far is the government willing to go, quote, "to protect people from the consequences of self-incurred risk?" Outlaw cigarettes? Fatty foods? Skydiving? Riding in automobiles? The government is not our nanny, it is not our big brother. Another aside: It is good this book isn't being written today because I think R.W. Grant would be apoplectic at this point from the current nanny state we seem to be heading towards.

Grant acknowledges a more difficult question, though, stemming from this protectionism. What about the safety of others? Should we not ban drugs because of the risk to others from people under the influence? Well, in the case of alcohol, it's not the act of drinking that is itself the crime, it is the act of drinking and driving. Would it not be consistent if the same standard were applied to other now illegal drugs?

Will drug use increase from its legalization? Has cigarette usage increased or declined over the years? It has declined due to knowledge of its health risks and a stigma that has developed. Grant believes that legalization would mean "the user would no longer be the free-spirited outlaw defying authority" and some of the risk and glamor would wear off.

In closing the chapter, Grant talks about the true addiction Americans have, the addiction to political force as a remedy for every social ill. He also, no surprise, says it's time to cut our losses in the War on Drugs and let them be legalized.

Environmentalism is the next target in the book, but Grant is careful to point out certain differences between the groups involved. The early conservationists were about preserving nature for future generations, but the vast majority of today's environmentalists have different goals.

The Leisure Class Environmentalist uses the cause to prevent other people or groups from economic development. They don't really care about bettering anyone's health or safety. The book cites, as an example, a coal-fired power plant in the Kaiparowits Plateau region of Utah which would have provided 3000 megawatts of power to LA, San Diego and Phoenix. The Mormon population favored the site due to it bringing new jobs to the area. Development was halted by environmentalists and eventually abandoned.

The Doomcriers use fear to push their agenda, typically with the goal of ending the capitalism they feel will destroy us in the end. Quotes from the likes of Murray Bookchin, David Foreman, Paul Ehrlich and Al Gore pepper this section. Grant tackles global warming and the climate models in this section. He points out that CO₂ levels are actually historically low looking at the entirety of Earth's existence. He reminds us that CO₂ is what plants crave (not electrolytes... watch Idiocracy). He asks the real question, and I think this is where I stand on the matter. "The real question is not whether global temperatures fluctuate, but whether they are measurably influenced by human activity." Climate models are only as good as the data they are given. It's a concept known as Garbage In, Garbage Out.

There's a bunch of stuff about the IPCC report, more about Al Gore I'm going to skip over. You've probably been hearing it for 30 years.

There's also the Neo-Paganists who place nature over humanity and reject technology. Reagan described these kinds of environmentalists as opposing any housing that didn't look like a bird's nest. While Doomcriers do not necessarily object to technology (they really just want it under their control), the Neo-Paganist does. They want to abolish it and return to a purer state of nature. They might be discounted as crazy, if not for the level of success they’ve had using legislation to stop technological breakthroughs. But one must ask, if we all return to this simpler way of life, would it be better or worse for the environment? Do we want to go back to using wood for cooking fuel? How many trees are saved because we have technology that allows us to use twice as much useful wood from any given tree? These are often the people that use endangered species to halt development. Reagan talked about the snail darter and furbish lousewort on several broadcasts. The Endangered Species Act is their saving grace, but it turns things on their heads. Through it, species are not preserved for the sake of people, but at the expense of people.

Thanks to hyper-regulation, the environment has become a plaything, a political tool, a cudgel to be wielded by the anti-capitalist.

We've come to the end of part 3.

Next time, in part 4, The Principles Applied, Alternatives to Political Force.

Same Bat Time.

Same Bat Channel.