I'd Buy That For A Dollar: Approaching “RoboCop” World

"Stay out of trouble!": Meet the future of law enforcement.

Until recently, Juan Rodriguez was a freeway patrolman employed by the City of Chicago. Now he cruises the Chicago Skyway “for private owners,” reports the current issue of Business Week. “In the past, [Rodriguez] had to write out a ticket for each problem” -- such as disabled vehicles, potholes, tire debris, and other traffic impediments. It would often taken the sclerotic municipal services department days to deal with the backlog.

However, on this particular morning all of the problems are cleared up before 10:30, which demonstrated to Rodriguez that the Skyway's new owners “are taking the Skyway to a whole new level.”

Those absentee owners belong to an international consortium created by the Australian-owned Macquarie Bank's Infrastructure Group and Cintra Concesiones de Infraestructura del Transporte of Spain. The same outfit now owns the Indian Toll Road. It is also deeply involved in the proposed 4,000-mile-long Trans-Texas Corridor, a project that would involve condemning huge tracts of private property (over 9,000 square miles of land) in the name of “eminent domain.”

When news of the T-TC hit rural Texas and Oklahoma, residents became understandably concerned. The editorial pages of the newspapers that serve those small communities began to resound with outrage: Nobody had asked them for input regarding a deal with a foreign-owned business combine that would drive many of them off their land – and create a toll road that would sluice profits into the coffers of that same foreign combine.

The Macquarie-Cintra combine heard those complaints, and acted swiftly: Macquarie purchased all of the small-town newspapers along the T-TC route. Now the newsrooms that once resounded with opposition to the combine are owned by it.

In just the last few years, Macquarie Bank – roughly a decade old – has become a major player in the new niche market of buying up transportation infrastructure, such as bridges and roads. It has spent billions of dollars to buy assets of that sort throughout North America.

Along the way, it has made some other interesting acquisitions as well: Besides the rural newspapers in Texas and Oklahoma, Macquarie bought out Giuliani Capital Advisors (GCA), which has about 105 employees in several major cities, including Chicago, New York, and Los Angeles. Created by that Giuliani in 2004, GCA specializes in bankruptcy restructuring and corporate mergers, both of which we will be seeing in abundance, if my suspicions are correct.

Macquarie was cleared by the Federal Reserve Board (.pdf) “to open representative offices in New York ... and Houston, Texas” in November 2003.

At a meeting of the Fed's Board of Governors almost exactly a year earlier, the Sith Lords discussed what the Financial Times referred to as “unconventional means” of pumping up the economy. One anonymous official – most likely current Fed Commissar Ben Bernanke – suggested that the Fed "could theoretically buy anything to pump money into the system,” including “state and local debt, real estate and gold mines--any asset.”

Hmmm.... Could “any asset” include such things as highways, bridges, airports, municipal utilities, and other publicly operated infrastructure now “owned” by debt-plagued states and cities?

Business Week opens its current cover story describing how Steve Hogan, executive director of Colorado's Northwest Parkway Public Highway Authority, was at the point of tears over a $416 construction debt when (trumpet flourishes and hosannas) he “got a letter from Morgan Stanley that promised to solve all of his problems. The bank suggested Hogan could lease the road to a private investor and raise enough money to pay off the whole chunk of debt. Now Hogan, after being inundated with proposals, is in hot-and-heavy negotiations with a team of bidders from Portugal and Brazil. `We literally got responses from all over the world,' he says.”

“With state and local leaders scrambling for cash to solve short-term fiscal problems, the conditions are ripe for an unprecedented burst of buying and selling,” continues Business Week.

Indeed: The Fed, under “Helicopter Ben” Bernanke, continues to inflate, which means it has plenty of pseudo-dollars to throw around. Bernanke earned that sobriquet for a notorious November 21, 2002 speech (delivered almost exactly a year before Macquarie was given permission to open its US offices) in which the future Fed chief hymned the praises of inflation:

“[T]he U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.... We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”

For instance, Bernanke said, the Fed and feds could hold deflation in abeyance by printing up bales of money and dropping them randomly from helicopters. This was inspired by a sarcastic comment once made by Milton Friedman. Oddly enough, the Fed managed to do this very thing in Iraq, dispatching pallets full of shrink-wrapped “cashpaks” to the Coalition Provisional Authority; the newly minted FRNs were often handed out from helicopters, as well as the back of trucks and jeeps, to all and sundry, and probably wound up buying some of the munitions now used to make orphans and widows of US military families.

But Bernanke, his mind a freshet of depraved inspiration, saw other potential avenues inflation could take: "[T]he Fed has the authority to buy foreign government debt, as well as domestic government debt. Potentially, this class of assets offers huge scope for Fed operations, as the quantity of foreign assets eligible for purchase by the Fed is several times the stock of U.S. government debt.”

He also noted that the Fed could buy up “a wide range of private assets,” including corporate bonds, bank loans, and mortgages. In order to hold deflation at bay -- that is, to spare us the horrors of falling prices --the Fed under Bernanke was prepared to create ever-depreciating dollars in sufficient quantity to buy everything in sight.

In late 2005, Richard Daughty, during a rare moment of lucidity in which he wasn't channeling the Delphic utterances of the Mogambo Guru, explained to me how this could happen:

"There's no limit to what the Fed is prepared to do. The only tool it has is inflation--creating money out of nothing. And Bernanke has explicitly stated that the Fed has the statutory means to use the money it creates to buy anything and everything, including stocks, bonds, houses, and raw land. It's entirely possible that someday we'll see the banking cartel literally owning everything--and Americans are letting this happen."

Why couldn't the Fed carry out this buy-out by way of foreign investment conduits – like the enigmatic Macquarie, and the equally mysterious “bidders from Portugal and Brazil” who were so eager to lend the embattled Steve Hogan a hand? After all, if Daughty's suspicions are correct, the process would have to start somewhere. Why shouldn't the pioneer be the previously obscure Australian bank that now owns the Chicago Skyway, the Indiana Toll Road, a string of refractory rural newspapers in Texas and Oklahoma, and a mergers-oriented financial firm it bought from the current front-runner for the 2008 GOP presidential nomination?

Macquarie may have been the first into the pool, but plenty of others are diving in: Goldman Sachs, Morgan Stanley, the Carlyle Group, Citigroup – all of which are very tight with the Fed, and all of which are exemplars of that perverse variety of oligarchical crony capitalism known as corporatism.

In that system, the risks are subsidized, the losses are socialized, and the profits are privatized.

In the current example, these investors are buying (with capital provided through Fed inflation) infrastructure that was created and maintained with tax dollars. As Business Week observes, infrastructure investments create “captive customers,” so “the cash flows are virtually guaranteed.” If the deals still don't work out, state and municipal governments (or, more likely, Washington) will step in and buy back the infrastructure concessions – or the Fed might find other investors, which is pretty much the same thing.

Consumers will be treated to monopoly pricing – always such a joy – and taxpayers will find no relief, because the politicians who sell off infrastructure concessions have already earmarked the profits for favored constituencies.

Question: If the Fed can buy up the physical assets of embattled city and state governments, why can't it buy up their law enforcement agencies as well?

Answer: It already has, at least in principle.

At this point, the attentive reader – I can see you there, your eyebrows knitted in puzzled curiosity, your foot tapping rhythmically to dissipate your frustrated impatience – is saying: “This is all sort of interesting, but what does it have to do with RoboCop?”

When I saw that film twenty years ago, it struck me as uncannily prophetic. (I speak of the original, not the pointless sequels.) Of all the dystopian visions available in literature and on film, RoboCop (directed by Paul Verhoven, a Dutchman) created an uncannily plausible vision of American totalitarianism – not the dismal, leaden grayness of Soviet Communism, or the lurid pageantry of Nazi Germany, but rather a society run by an all-pervasive corporation that controls its subjects through a combination of synapse-killing mass entertainment and soul-chilling violence.

In that world Omni Consumer Products is the government; it is the military, the police, and the media.

We're not in RoboCop world yet, but we can see its suburbs from here.

Program Notes

To those eagerly awaiting a long-delayed installment of Pro Libertate: the e-journal, I say: Nil desperandum -- it will be available shortly.

I have been invited to address the upcoming Spring Convention of the United Republicans of California (UROC) on May 19 in Arcadia, California.

The website of the Christian Liberty Party has an audio recording of my April 21 address to the National Committee Meeting of the Constitution Party in Boise, Idaho. I wish to thank Keith Humphrey for making that speech available, for maintaining an amazingly information-dense website, and for his incredible generosity toward my family.

And I'm still working on final edits to the manuscript for my new book, tentatively entitled From Republic to Reich: How the Imperial Executive Devoured the Bill of Rights. I'll let you know as soon as it's available.

The Right Source offers in-depth articles, both in its current news and archives, dealing with this and other important stories. Please check it out.

The Bubble Collapses, The Police State Expands (Quick Update)

I want to thank Jerri Lynn Ward for inviting me on her program "I Object! Justice Examined" to discuss (along with Dr. Herb Titus) the right to keep and bear arms. Those interested in listening can hear the program on Right Talk radio; click on Miss Ward's icon at the bottom of the page. The program will re-start at five past the hour for the next day, and will be available as a podcast after 7:00 PM this evening. As you listen, please bear in mind that I am, once again, battling a bad chest cold -- so I hope the coughing and sniffling aren't an insuperable distraction!



Evicted: Abandoned personal effects were piled on the lawn of this foreclosed home in Colorado's Adams County. The Sheriff's Department emptied the house and changed the locks.

With the Dow peaking above 13,000, the most observers direct their gaze skyward as they wonder how much higher the market can climb. Few are taking the time to examine the market's decayed and crumbling foundation, as they wonder how soon the structure will collapse.

The market is not built on rock or even on sand, but rather perched precariously atop the housing/mortgage/refinancing bubble the Federal Reserve so diligently inflated during the first half of the decade. Wall Street's necromancers have transmuted debt into “wealth” by creating exotic financing mechanisms to encourage mortgage lending to dubiously qualified – or entirely unqualified – home buyers, and then securitizing those loans for investors. This scam – like many others -- works fine as long as the housing bubble continues to expand.

Now that the bubble has burst, defaults and foreclosures on “sub-prime” mortgages are mounting. Hundreds of thousands of families have lost their homes; neighborhoods and communities are being ravaged; and municipal governments face what could be called “gentrification in reverse” -- the creation of vacant, deteriorating urban areas that become magnets for crime.

The last to suffer will be those who most richly deserve to – the Fed-allied financial interests who have facilitated the entire scam by luring people into unmanageable debt.

In Cleveland, reported the New York Times on March 23, “Hundreds of houses are vacant because they are caught in legal limbo, have been abandoned by distant banks or the owners cannot find buyers.” In suburban Euclid “more than 600 houses have gone through foreclosure or started the process, many of them the homes of elderly people who refinanced with low two-year teaser rates, then saw their payments grow by 50 percent or more.”

Euclid's city government, which claims an annual property tax shortfall of $750,000 from the vacant houses, has hired new building inspectors and has taken out a $1 million loan to pay for “rehabilitation, demolition, and lawn care at the foreclosed houses.” The city anticipates recovering those costs through tax assessments when the renovated buildings are sold.

What if, in an ever-softening real estate market, they don't sell?

Well ... the one constant here, from the municipal government's perspective, is the need for more revenue. So homeowners who have kept up with their mortgages, or own their homes outright (as opposed to renting them from the bank, which is what a mortgage amounts to), will see their taxes go up – dramatically, I'll bet.

I suspect this process is behind yesterday's (April 25) USA Today headline: “Property taxes up as house prices fall.” The story explains that despite the housing downturn, “the market value of millions of homes still exceeds their assessed value used for tax purposes.” Many homeowners are caught in an interesting predicament: The value of their homes hasn't declined quickly and steeply enough to help them avoid a tax increase, or an abatement in their taxes corresponding to the reduction in their equity.

“To get a tax cut,” comments Dan Goodwin, a tax assessor for California's Ventura County, “you have to buy a home at the peak and have it lose value quickly. You can't enjoy double-digit increases in you home value and then expect a tax cut when the market dips.”

Well, why not? With household budgets already under stress from increases in non-discretionary spending – food, energy, and housing – why can't county governments bite the bullet and take in a little less?

There are countless ways to answer that question, but they can all be easily digested into this simple proposition: County governments have constituencies to feed, and they have Sheriff's Departments to command.

So you pay what they tell you to pay, or wind up like the Sundsmos.

A rising tide lifts all boats, and (to alter the metaphor) a collapsing nation-wide real estate bubble is likely to drag everybody down – beginning with those who are trying to get out of mortgages they can't afford to pay.

As an earlier USA Today story pointed out, foreclosures on sub-prime mortgages depress housing values in entire neighborhoods. “Why pay full price for my house when you can pick up a foreclosure for $30,000 or $40,000 less?” asks Dannice Clark, a postal worker from Atlanta who is trying to sell her home.

Among those who are seeing their equity evaporate, warns Dan Immergluck of the Georgia Institute of Technology, are homeowners who qualified for interest-only mortgages, which are poised to re-set. “I'm concerned that could really tip some of these middle- and upper-income neighborhoods, in terms of high foreclosure rates,” Immergluck warns.

In Georgia' Gwinett County, as in Ohio, Michigan, and elsewhere, many abandoned homes have been neglected by the banks or other lending institutions that own them. Some of them quickly fall prey to vandalism, or attract squatters. This, in turn, leads to an increased police presence, often carried out by “Quality Of Life” (QOL) units, who are tasked to enforce building codes and ordinances dealing with graffiti and vagrancy.

The creation of QOL patrols was inspired by the “broken window” premise -- that is, a broken window, littered sidewalk, or unattended home "sends a signal" that a neighborhood is fair game for reprobates. One commentator summarizes that theory thus: "[T]he smallest symptoms of antisocial behavior will, left to fester, breed greater and greater crimes, all the way down to murder."

While there may be some merit to that theory, in practice -- as in New York City under the reign of Il Duce Giuliani -- "quality of life" policing has sometimes led to replacing the anarchic violence of street criminals (or merely the unsightly spectacle of street beggars) with state-sanctioned violence -- such as the unpunished murder of private security guard Patrick Dorismond by undercover New York narcotics officers.


(Dorismond, the father of two, was accosted by the officers, who asked where they could buy drugs. He took offense, and a scuffle ensued in which Dorismond was fatally shot in the chest. As public outrage mounted over this needless death, Giuliani illegally unsealed Dorismond's juvenile delinquency record, and released a toxicology report showing that the victim had smoked marijuana shortly before he was killed -- none of which has anything to do with his summary execution at the hands of police who, according to eyewitnesses, provoked the fight and then spat profane invective at the young father as his life bled away.)


Taken in the abstract, QOL-oriented policing seems like a good idea, if only because it addresses the age-old complaint that there's never a policeman around when you need one. The problem, once again, is found in the practice, rather than the principle. In practice, QOL policing means the ever-increasing presence of armed government agents in the employ of revenue-starved governments, there to enforce often obscure ordinances regulating how you cut your grass, care for your lawn, paint your house, maintain your car, and even feed your dog. And intrusions of this sort can now be justified as a way of helping to keep property values up in your neighborhood -- as if anything you can do would have a bigger impact than the Fed's manipulation of the money supply.

In prosperous and stable times, this is a formula for trouble. What happens when the prosperity (or at least the illusion of the same) is gone?

Think of it this way: Quality of Life policing is a creative way of weaving armed agents of the state into the fabric of a community, just as the unwinding of the housing/mortgage/refinancing market causes that social fabric to become undone.

Video extra:

In this clip from Boston Legal, Alan Shore -- the high-viscosity uber-lawyer played by James Spader -- peels the skin off an attorney representing the credit card industry. Shore's soliloquy is filed under "Things I Wish I Had Written," and, in fact, it does remind me a great deal of at least one essay I did write.

Make sure to visit The Right Source.

The Second Amendment: The Constitution, In Miniature

"We are here now to protect you, and no one has a need for a weapon any more.” --

A Khmer Rouge soldier sent to disarm Cambodian peasants, as recounted by a survivor of the Cambodian genocide; The New Yorker, January 24, 1994

It is because Daniel Lazare makes no effort to disguise his contempt for the US Constitution that he enjoys the luxury of candor about its provisions.

In his 1995 book The Frozen Republic, Lazare assailed the Constitution for “paralyzing democracy” -- which was one of the key objectives of the Framers, who did not share Lazare's enthusiasm for “majoritarian absolutism” (as one critic aptly described the author's philosophy).

To his credit, Lazare doesn't claim to have found some previously concealed progressive subtext in the Constitution, or offer flatulent platitudes about the “true” meaning of the “living” document. He admits that the Framers created a system in which the powers of the State were to be limited by a written text and not easily expanded through demagogic appeals to the mob.

In similar fashion, Lazare's October 1999 Harper's magazine essay “Your Constitution is Killing You: A Reconsideration of the Right to Bear Arms,” Lazare – a stout supporter of civilian disarmament – offers the following rueful admission:

“The truth about the Second Amendment is something that liberals cannot bear to admit: The right wing is right. The amendment does confer an individual right to bear arms, and its very presence makes effective gun control in this country all but impossible.”

Even here, Lazare misses the most important point, namely that neither the Second Amendment nor any other part of the Constitution could be said to “confer” rights of any kind; rather, they protect unalienable rights by specifying what government can do, and a few of the myriad things it is prohibited from doing.

(A brief digression: Even in the absence of the Second Amendment, the Constitution would protect the individual right to bear arms, since it does not confer on the federal government the authority to disarm the citizenry. The Amendment is an important supplemental protection, however, in that it denies the central government the luxury of using its delegated powers – for instance, that of regulating interstate commerce – to infringe on that right.)

Despite his subtle denial of innate individual rights, Lazare's admission against interest is useful, as are his pointed words of rebuke to fellow “liberals” (here meaning left-leaning collectivists, not lovers of individual liberty) who interpolate their political prejudices into the Constitution's text.

“We have long been in the habit of seeing in the Constitution whatever it is we want to see.,” Lazare admits. “Because liberals want a society that is neat and orderly, they tell themselves that this is what the Constitution `wants' as well.” That desire translated into, among other things, a “purely collectivist reading” of the Second Amendment, in which the purported right mentioned in the text is that of states to create and regulate “select” militias; this is in contrast to the “individualist” view, in which the right to bear arms – like those of speech, freedom of worship, and all other rights and immunities protected in the Bill of Rights – is exercised by the individual.

The “collectivist” view, Lazare writes, “is becoming harder and harder to defend” as more honest scholarship – that is, honest scholarship, more widely reported – demonstrates what should be obvious: The American Founders, who had wrested independence from Britain in a war that began with gun-toting citizens repelling an effort to disarm them, were determined to protect the individual right to armed self-defense. And nothing could be more alien to their intentions than the “collectivist” view of firearms ownership.

“`Standing armies,' the great bugaboo of the day, represented concentrated power at its most brutal; the late-medieval institution of the popular militia represented freedom at its most noble and idealistic,” writes Lazare. “Beginning with the highly influential Niccolo Machiavelli, a long line of political commentators stressed the special importance of the popular militias in the defense of liberty. Since the only ones who could defend popular liberty were the people themselves, a freedom-loving people had to maintain themselves in a high state of republican readiness. They had to be strong and independent, keep themselves well armed, and be well versed in the arts of war. The moment they allowed themselves to surrender to the wiles of luxury, the cause of liberty was lost.”

Does anybody really think it's a good idea to let Bucketheads like these have all the guns?

Lazare is warily circling a point that he apparently doesn't want to make clearly, so I'll do it for him:

The Second Amendment does explicitly protect an individual right to bear arms, but its real significance is that it denies the government a monopoly on the legitimate use of force.

The typical political science textbook published in the last five decades will either assert or assume that government claims a monopoly on force. This is Lenin's vision -- “power without limit, resting directly on force” -- not that of Jefferson, et. al. -- namely, that of governments as contingent entities “deriving their just powers from the consent of the governed,” and subject to abolition when they exceed their modest mandate.

They can't operate a parking brake on their federally funded Gestapomobiles, but they're uniquely qualified to carry and use firearms.

Lazare, like every other commentator, politician, or scholar who wants to transmute the individual right to armed self-defense into a limited, State-granted privilege, is on Lenin's side of this argument. He's simply more honest than most, even though his concessions are heavily seasoned with condescension toward the supposedly archaic views of the Framers.

“Since `we the people' are powerless to change the Second Amendment, we must somehow learn to live within its confines,” he writes as if sighing in weary frustration. “But since this means standing by helplessly while ordinary people are gunned down by a succession of heavily armed maniacs, it is becoming more and more difficult to do so.... There is simply no solution to the gun problem within the confines of the U.S. Constitution.... Other countries are free to change their constitutions when it becomes necessary. In fact, with the exception of Luxembourg, Norway, and Great Britain, there is not one advanced industrial nation that has not thoroughly revamped its constitution since 1900. If they can do it, why can't we? Why must Americans remain slaves to the past?”

Lazare's writing is shot through with the sort of smug historicism one would expect of a modestly bright undergraduate: How could a group of unenlightened white males – most of them Christians of a repellently literalist sort – who gadded about in powdered wigs and tricornered hats possibly have anything worthwhile to say about our modern society and its problems?

The obvious answer is that the Framers knew a great deal about human nature as magnified by political power, and that because of their sound insights the US Constitution, unlike a milk carton, doesn't contain an expiration date.

Nothing that has occurred since 1787 has invalidated the wisdom of the Framers in decentralizing political power and denying the State a monopoly on force. Exactly the opposite is the case: When viewed in retrospect across centuries littered with war and political mass murder carried out by states that claimed a monopoly on coercion, the honest observer whose mind is not hostage to collectivist delusions is astonished at the Founders' foresight.

“Heavily armed maniacs” of the sort Lazare alludes to can kill dozens of unarmed innocents. Heavily armed maniacs in the employ of the State, and clothed in its supposed authority – the oh-so-helpful Khmer Rouge soldier quoted above, for example -- have killed tens of millions of disarmed victims. Important though the first consideration is when we're discussing the right protected by the Second Amendment, it is the latter that best illustrates why that Amendment could be considered the Constitution in microcosm.

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