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When Graft Is the System

I love the Wall Street Journal—the daily diary of American despair. Even if some of the stuff isn’t exactly news, or news of the “I told you so” variety.

The Manhattan Institute’s excellent Steven Malanga reports that states and their hangers-on have tried to cover up the state pension crisis. Kind of like Mrs. Kirchners’s Argentina, where economists got fired (or worse) for publishing the actual inflation numbers. Difference being, Argentina is cleaning up its act and we aren’t.

Also, the WSJ carried a piece by Andy Koenig, on the cash that flows from bank settlements to liberal advocacy groups for “fair housing” and to state pension funds. The author urges Congress to get a handle on the diversion of funds that by law belong to the Treasury. Good luck with that: it can’t be done. For starters, those advocacy groups have never been anything but creatures of Congress (for example, through the Community Reinvestment Act, which permits the groups to hold up bank mergers). The entire “99 percent” and “Occupy Wall Street” movements have been bank-financed from day one. Charlie Calomiris and Stephen H. Haber have explained it. So have Chris DeMuth and I, here  and elsewhere. For another thing you can’t stop the diversion of penalties because both the government and its “enforcement” targets will be better off by settling outside a system that already demands the payment of penalties to the Treasury. How exactly is Congress to patrol that? And what exactly are its incentives so long as the deals throw off some money for the Treasury?

Told you once before (and I won’t tell you no more): you cannot eliminate graft from the system when and because graft is the system. And we are becoming Argentina, with the same quasi-feudalist social structure and the same institutional pathologies. I’ll say this, in defense of our system: it has thrown up two presidential candidates who completely get it, and most pristinely embody it.

Reader Discussion

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on September 01, 2016 at 09:24:08 am

Unfair of you to leave the good old EU out of this august body of swindlers and double dealers: see the latest EU *judgment* against apple wherein what was once legal (per two EU rulings in early 1990's) is now illegal and subject to massive penalties.

We are in *good* company!!!

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gabe
on September 01, 2016 at 11:47:02 am

Of course, there may be a bright side to this: the end of partisan bickering.

From today's news:

Paul Ryan and Chuck Schumer have agreed that "The EU should not be *GRABBING* this money, WE SHOULD"

Now that is a *system."

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gabe
on September 01, 2016 at 12:11:20 pm

"Told you once before (and I won’t tell you no more): you cannot eliminate graft from the system when and because GRAFT IS THE SYSTEM. " [emphasis supplied]

That is a fascinating observation to achieve a description of a "system" by analogy to a physical process -the GRAFT.

Physically, graft is a process to divert the distribution of nutrients to support growth of something extraneous to the *original* (or primary) organism. That can include transfers of tissues (skin, e.g.), a branch of a rose bush; on to the extent of diverting all the nutrients from a root stock to support a different form of plant (as in viniculture and citrus culture). So we come to Professor Greve's analogy:

The operations of government (as a system) are now the distribution of "economic" nutrients. And, it is hard to refute that the operations of government are now largely engaged in the activities of distribution.

This occurs during a period when the "economy" of the nation is transitioning from predominantly production orientation to distribution orientation as a major focus of physical and innovative activities.

Though disruptive, it should not be surprising that political forces (the modes of advancement of particular interests) have co-opted the functions of government to instrumentalities of economic distribution as part of the transition. Once distribution is established as a function of government, particular interests will attempt , with varying success, to attain benefits from that function.

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Image of R Richard Schweitzer
R Richard Schweitzer
on September 01, 2016 at 14:27:03 pm

And thus, we have prepared some rather fertile soil for all the RE-distributionists among us.

I'll leave my grafting to viniculture, thank you!

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gabe
on September 01, 2016 at 22:35:56 pm

Would that we all could.

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Image of R Richard Schweitzer
R Richard Schweitzer

Law & Liberty welcomes civil and lively discussion of its articles. Abusive comments will not be tolerated. We reserve the right to delete comments - or ban users - without notification or explanation.

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