Year: 2012

National Economic Systems: An Introduction for Intelligent Beginners – 3

Jacques Delacroix Current Events, Economics, Liberty , ,

My Debt, your Debt and Future Poverty.

I told you in previous installments of this series of essays that we, in the USA, are not facing one economic crisis but two.

The fist crisis is a recession. It’s a common event in the long run of market economies. Recessions are defined by serious people (according to me) as two consecutive quarters or more of economic shrinkage. Recessions go away whether any government does anything about them or not. One school of thought (Keynesian), to which the Obama administration belongs, maintains that large government spending – stimulation- can lessen or shorten a recession. I argued that the Obama stimulus package of several months ago cannot possibly stimulate, even if you believe in the stimulation scenario.

The second crisis, by far the most serious, is the abnormally high debt the federal government has incurred since President Obama came to office. It disturbs me because the people, you and I, will have to pay interest on the debt for a long time, and eventually re-pay the principal. Else, the government will have to repay its debt in bad currency, in devalued or in eroded currency. If this happens, we will simply all be poorer, in real terms, If your dollar is worth half in ten years of what it is worth now, you will simply have to pay two dollars for what you buy today for one dollar. There is no reason to assume your income will automatically follow. This is a common fallacy (perhaps the topic for another essay): It takes about forty Indian rupees to buy a US dollar today and the same mountain bike that costs 400 US dollars in this country costs 600 US dollars in India. A good income in India would be 12,000 dollars per year. (That’s about twelve times the national average.)  Continue reading →

Le nouveau mandat d’Obama

Jacques Delacroix Current Events, Politics

Selon ce que j’ai entendu à la télé française pendant la campagne, les Francais ont souvent du mal à comprendre le sytème électoral américain. Celui-ci est, à vrai dire, assez peu accessible à l’intuition.

Voici une précision sur l’élection présidentielles de 2012 qui aura échappé, je crois, à tous les commentateurs Francais. Obama l’a emporté en Floride, après un comptage épuisant, par 50% contre 49,15% seulement. Au plan national, Obama a gagné les élections de façon décisive avec 332 voix de grands électeurs contre 206. Cependant le proche examen du vote populaire impose une interprétation divergente du mandat que lui aura octroyé cette élection.

Un court article du Wall Street Journal du 14/11/12 fait observer qu’il aurait suffit de 333.000 votes supplémentaires pour Romney, répartis sur seulement trois états, pour que ce dernier l’emporte. Ceci pour un total de suffrages exprimés dépassant 120.000.000 (cent vingt millions), ou donc une proportion comme ceci: 333/120.000.

Je répète qu’Obama a indubitablement gagné. Cependant, il n’est pas possible de considérer sa victoire comme écrasante.

Ce fait explique en partie pourquoi beaucoup des conservateurs défaits par cette élection, moi y-compris, se prononcent déjà pour que le Parti Républicain se serve de sa majorité à la Chambre des Représentants pour faire de l’obstructionisme vis-à-vis des politiques fiscales à venir du président re-élu.

[Editor’s note: this essay first appeared on Dr. Delacroix’s blog, Facts Matter, on November 14th 2012]

Foldvary on the Concept of “Forward”

Brandon Christensen Current Events, Economics, History, Politics ,

Co-editor Fred Foldvary has an excellent post on the historical meaning of the Obama campaign’s choice of the word “Forward” as its political slogan. He writes:

The issue here is not about any political campaign, but the social concept of “forward.” Socialism is, first of all, a family of concepts. Some socialists seek greater statism, the control of society by the state. Other seek “social democracy,” whereby people vote on the major policy options. There are also socialists who seek to put the means of production, land as well as capital goods, in the hands of worker cooperatives.

Usually the “forward” thinkers seek, if not as an ultimate goal, then as the instrumental goal, a governmental control at least of the “commanding heights” of the economy: the financial system, the highways, education, medical care, and retirement pensions. Socialists seek strong controls on the remaining private production, and they also seek an equalization of wealth through a massive redistribution, with highly progressive taxation.

But the world has already experienced the results of “forward” policies in the failed economies of the old USSR, the China of the 1950s and 1960s, Cuba, North Korea, and Eastern Europe. The “forward” socialists seek a progression to the failed past. Of course they claim that their brand of socialism is different from that of the collapsed USSR, but the evidence of history reveals what was attempted in practice world-wide, even when it differs from hypothetical doctrines.

And this, too:

Instead of “forward,” a better metaphor may be “upwards.” Upward takes us to a higher place, and also to the origin of a flow such as a river. But how do we know which way is “up”?

Do read the whole thing, and what do you guys think of Dr. Foldvary’s suggestion of moving “upwards”?

National Economic Systems: An Introduction for Intelligent Beginners – 2

Jacques Delacroix Current Events, Economics , , , , , ,

Part Two: Taxing the Rich.

I argue in Part One of this essay that the stimulus package could not possibly stimulate the economy the way a stimulus package is supposed to do. That is, the present stimulus package cannot shorten or lessen the current recession by stemming the growth of unemployment and by jump-starting the national economy, the way Keynesian economics has it. I suggested there had to be another agenda for this massive spending of public money.

Recessions – two consecutive quarters when the national economy contracts instead of expanding – are common under capitalism, in market economies. They wane, whether or not anyone does anything about them. This fact makes if difficult to assign credit to government measures designed to lessen or shorten recessions when economic indicators do look good. Economic indicators don’t look good right now, although some of the press is announcing the beginning of the beginning of the end of the recession.

At any rate, the recession will end eventually. That is, economic growth will resume. I would bet on it but I don’t know when. When growth resumes, we will be left with the second economic crisis facing us. That second crisis is less routine, more extraordinary, and more worrisome than the first crisis, the recession itself. It’s massive public indebtedness. I have to go into the reasons why the Federal Government is even able to incur massive debt. Continue reading →

Around the Web

Brandon Christensen Links ,
  1. Delacroix shares his thoughts on Obama’s re-election.
  2. Cowen on the fiscal cliff.
  3. Oh goody.

I’ve had a crappy midterm session. Forgive my hasty posts of late. On the bright side: I am now officially off the streets (at least until February).

Happy hump day everybody!

Brandon Vindicated (and Relieved!)

Brandon Christensen Current Events, Economics, Politics , , , ,

I read a lot of blogs in my spare time, and one of my favorites is the Monkey Cage, a blogging consortium made up of technocratic, internationalist-minded Left-wing political science professors. They rarely disappoint. I know what you’re thinking, but if I could choose which faction of the left I would want opposing libertarian policies it would be the technocratic Left. It a movement that has individual liberty in mind and is, as I mentioned, internationally-minded.

Notice also how I take into account the fact that an opposition to my own views are a necessary component of my utopia. Too many advocates of liberty don’t realize this when they argue about politics. Which factions would play the role of opposition in an anarcho-capitalist paradise, for example? It seems to me that the quality of one’s perfect opposition is actually quite a good gauge for measuring the quality of one’s political ideal (if I do say so myself!).

Anyway, Patrick Egan, of NYU, has a new post up explaining that the economy was indeed the central issue of the election, and then busts out the data to back up his argument (and help me save face!). I think this is an important point because I’ve already made the rounds around the blogosphere and many otherwise smart, competent people seem to want to chalk up Obama’s victory to something other than the economy.

From Egan’s post: Continue reading →

From the Comments: Social Conservatives Need to Go

Brandon Christensen Comments, Current Events, Politics

Longtime reader –Rick observes:

The Republicans need to re-brand and delete all social conservative positions from their platform. If the God freaks don’t like it, too bad. Let them stay home, vote Democrat or Republican as they wish. So called conservatives should be concentrating on small government, a strong military, a philosophically principled foreign policy, and a secular judiciary that ignores all religions and judges based on the facts and the rule of law.

Their new platform needs to be more inclusive, particularly with Hispanic concerns, not out of a sense of pragmatics, but if America is to develop an expanded trade relationship with Hispanics, how willing will their governments be to participate with radical xenophobes who treat their southern neighbors with disdain in juxtaposition to the favorite status given to our neighbors to the north?

It’s economics. They need jobs, we need workers and an expanded tax base as well as new trading partners. Let the Xenophobes vote with the KKK as a bloc. Their absence won’t be missed. The Constitution states that all men were created equal – not just U.S. citizens and Canadians.

However, I won’t get my hopes up that the leadership will suddenly turn rational and see the possibility of gaining 2 or 3 new voters for every one bigot they ignore in constructing their philosophical/political planks.

I couldn’t have said it any better myself. The sooner the GOP turns its back on social conservatives, the sooner it can get back to being a national political party again. Be sure to check out –Rick’s blog here.

Obama: Any Silver Lining?

Warren Gibson Current Events, Politics , , , ,

So it’s four more years of Obama.  What can we expect?

Obama makes me, a libertarian these last 40 years, nostalgic for the sort of “liberals” who until recently dominated the Democratic Party.  At least those folks have some respect for facts and tolerance for other points of view.  Obama is different.  I know longer think it an exaggeration to say that Obama hates America, as Rev. Wright preached to him for twenty years.  I have a new understanding of Obama thanks to Dinesh d’Souza’s book “Obama’s America.” Barack Obama had an epiphany at the grave of his father, a man who was a leader among the anti-colonialists of Kenya.  The man was a no-good drunkard who deserted and abused more than one wife and child, yet Barack was able to put aside these faults and hitch his star to his father’s cause. His first term in office gave us numerous actions that exemplify his quest to bring America down.  He likes to stir up class hatred.  His tax proposals are all about fairness, as defined by him, of course, and never mind the ensuing economic damage.  That they punish the most productive among us is all to the good; that they damage all of us in the long run doesn’t matter. He has seized control of health care.  He has acquiesced in a brutal war on medical marijuana patients, waged by his Northern California District Attorney and others.  He has ordered assassination of U.S. citizens and condoned domestic spying.  The CIA continues its massacre of civilians in Pakistan, a supposed ally.  All of this would make a high-class liberal like Adlai Stevenson gasp with horror.

Thank God we still have a Republican House and a Senate where they can filibuster.  Gridlock will probably prevent any new atrocities of the scale of Obamacare.  But the door remains open for a great deal of evil-doing.

First off, there will be at least three Supreme Court appointments in the next four years.  It’s a sure bet that Obama will appoint “social justice” types, the sort who have no concept of the Constitution as a document intended to limit the powers of government.  These are life appointments so the new appointees could be wreaking havoc long after Obama is gone.

Second, the President has a great deal of latitude in foreign affairs. Just look at the damage George Bush inflicted on the world with his senseless wars in terms of casualties, hatred of America, and insolvency.  But there is a ray of hope here.  The warmongering neo-cons are on the sidelines and Obama’s ineptness in foreign affairs may spare us some future dustup that Romney might have provoked.

This isn’t the silver lining I had in mind, however.  I present here, with misgivings, a viewpoint suggested by my colleague Jeff Hummel. He likes Obama’s victory because he thinks it will hasten our Götterdämmerung – the collapse of Social Security and Medicare and default on Federal debt.  Out of the ashes will come a new order in which Social Democracy has been rooted out of the polity, as the paroxysm that was the Civil War put an end to slavery.  This is a viewpoint with which I have a great deal of sympathy while continuing to hope for some sort of “soft landing” instead.

Social Democracy is the idea that individual choices of all sorts must be decided by voting and enforced by the government, the agency of compulsion and coercion as Mises called it.  I wouldn’t contest the proposition that Social Democracy is a cancer on our society that ranks with slavery in its banefulness. I dearly hope that a future upheaval might root it out but I’m not so sure.

I hasten to emphasize that I say “ashes” metaphorically.  We will survive the demise of the Federal government.  The sun will still rise and physical assets will remain in place.  The damage done to the social fabric will be lessened if people see the collapse coming.  That private individuals can and do step in when government collapses was illustrated on a small scale by a recent incident involving the California park system.  A list of parks scheduled for closure was published and it looked like private groups had raised enough money to keep at least some of them open. (Then some bureaucrat found $50 million lying around in the Parks Dept. and the private groups gave up in disgust.)

I confess to being a bit more conservative than Jeff Hummel.  I’m slightly older and may have more to lose as things get worse.  I continue to hope that libertarian ideas will continue to infiltrate the public discourse and that the respect for productive people that is still held by a substantial though declining segment of the population will rein in Obama and his hangers-on.

The View from California

Brandon Christensen Liberty

In other election news, the Atlantic reports:

On Tuesday, California voters overwhelmingly approved two ballot initiatives that were sharply opposed by the very same “victims” they were allegedly designed to protect. The final vote tallies are not yet in, but it looks like there was statewide approval for new criminal penalties on prostitution-related offenses, while a Los Angeles-only proposal to mandate the use of condoms in all pornographic films shot in the county is also heading to victory.

Ouch. And then there’s this:

The entire ballot initiative process in California has long been derided because of the way it allows special interest groups to bypass the legislature and create laws themselves. It also makes ballot an jumbled mess and frustrates voters with confusing and sometimes contradictory proposals. These are just two of latest examples that will have Californians spending a lot of effort helping people who didn’t ask to be helped.

Indeed. There is more here. I almost feel guilty for not voting now. California is often acknowledged (or derided) as a state known for its social tolerance, but I haven’t seen this at all in the political arena. From banning gay marriage to demanding that porn stars wear condoms (I wonder what that will do our state’s multi-million dollar porn industry?) to imposing stiffer penalties on sex workers, Californians can hardly claim to be the socially liberal torchbearers of a brave new world. Instead, I see a state populace comfortable with both draconian tax laws and draconian social laws. Socialism has never looked so good.

On the other hand Continue reading →

The End of the Conservative Media? Or Why Brandon Was Right (Sorta)

Brandon Christensen Current Events, Politics

Conservatives should be familiar with its contours. For years, they’ve been arguing that liberal control of media and academia confers one advantage: Folks on the right can’t help but be familiar with the thinking of liberals, whereas leftists can operate entirely within a liberal cocoon. This analysis was offered to explain why liberal ideas were growing weaker and would be defeated […]

Conservatives were at a disadvantage because Romney supporters like Jennifer Rubin and Hugh Hewitt saw it as their duty to spin constantly for their favored candidate rather than being frank about his strengths and weaknesses. What conservative Washington Post readers got, when they traded in Dave Weigel for Rubin, was a lot more hackery and a lot less informed about the presidential election.

Conservatives were at an information disadvantage because so many right-leaning outlets wasted time on stories the rest of America dismissed as nonsense. WorldNetDaily brought you birtherism.Forbes brought you Kenyan anti-colonialism. National Review obsessed about an imaginary rejection of American exceptionalism, misrepresenting an Obama quote in the process, and Andy McCarthy was interviewed widely about his theory that Obama, aka the Drone Warrior in Chief, allied himself with our Islamist enemies in a “Grand Jihad” against America. Seriously?

Conor Friedersdorf has more here. Do read the whole thing.

I was wrong in my prediction that Romney would win, but only because I hadn’t been paying attention to the most recent jobs reports. Unemployment rates are low enough for Obama to win re-election. So my overall point that the economy trumps everything else is still spot on. Can you imagine Obama winning re-election with unemployment at 8.5%? Me neither.

The GOP could have taken a lesson from Tocqueville’s Democracy in America, though, and realized that while Americans respect wealthy people more than most other societies, such respect hardly ever translates into political success (rich people already boss us around at work, why would we want them bossing us around in the political arena as well?).

And, in case you are wondering, I didn’t vote. If I had, I would have voted for Gary Johnson, “no” to tax increases and “yes” to abolishing the death penalty.

Any Thoughts on the Election?

Brandon Christensen Politics

I made my predictions earlier this year. I stand by ’em.

Jacques Delacroix shares his thoughts here.

What about you guys?

Is the State Responsible for Declines in Violence?

Brandon Christensen Current Events

A couple of days ago Dr. Delacroix raised this question. I finally got around to critiquing it here. An excerpt:

We should be looking at what institutions have enabled the nation-state to establish itself, survive, and eventually thrive (at least in western Europe and Japan; the US is a republic, not a nation-state) in the world today.

Do read the rest, and (God forbid!) add your own two cents as well.

“Ayn Rand Explained”

Warren Gibson Liberty

Sales of Atlas Shrugged soared to 445,000 copies in 2011, more than 50 years after it was published. Books about Rand are proliferating as well, including major biographies by Anne Heller and Jennifer Burns. Is there room for yet another volume in this increasingly crowded field? Marsha Enright has shown that there is.

Ms. Enright promises a lot with her title, Ayn Rand Explained, and she delivers. She brings to her task a background reaching back to the early 1970’s when she first met Rand. Her writing suggests a keen intelligence and an independent spirit. The result is a book that is thorough and careful but not pedantic.

Her personal recollections portray Ayn Rand’s warm and approachable side and not the angry cult figure suggested by some. Particularly charming is the story about the cat jewelry.

A new reader or a moviegoer who wants to learn more about Rand and her philosophy, objectivism, will soon discover that there are two camps of followers. David Kelley’s Atlas Society promotes the view that objectivism, as a set of ideas, is necessarily open to extension by any serious thinker who accepts its basic premises. The Ayn Rand Institute is a far larger group because it receives royalties on the heft sales of Rand’s books. The ARI calls objectivism a closed system. Ms. Enright addresses this conflict head-on, explaining both positions evenhandedly and giving credit where credit is due.

Careful analyses of Rand’s novels are followed by a 40-page explication of objectivism, proceeding systematically, as Rand did, from metaphysics to epistemology to ethics to politics and esthetics. Some readers may find this section heavy going and may want to skip it and return later. If they do return, they should be well rewarded.

A separate chapter on politics takes up the uneasy relationship between libertarians and objectivists. She offers back-to-back sections outlining the case for the “plaintiff” (objectivism) and for the “defendant” (libertarianism). I found these sections particularly interesting now that ARI is making nice to libertarians, a sin that earlier got David Kelley kicked out of ARI.

I thought Nathaniel Branden deserved a little more sympathy than he got in this book. He and Barbara Branden have been the victims of vicious smears from the orthodox camp. Nathaniel has admitted the errors he made in his relationship with Rand while Rand never admitted hers, which were far greater. He has redeemed himself many times over, in my view, by the positive difference he has made in the lives of a great many people, both in person and through his books and lectures.

“Ayn Rand Explained” will be my top recommendation to anyone who asks me about Rand and objectivism.

Jews and Palestinians: Is the Elusive Peace Close By?

Brandon Christensen Current Events, Links, Politics, Religion , , , , , , ,

A couple of days ago I came across this fascinating article in the Wall Street Journal. It’s about the expulsion of Jews from Arab lands around the same time as the expulsion of Arabs from the new state of Israel and how the Israelis have finally gotten around to bringing this issue up in negotiations. Among the excerpts:

Within 25 years [of the establishment of Israel], the Arab world lost nearly all its Jewish population. Some faced expulsion, while others suffered such economic and social hardships they had no choice but to go. Others left voluntarily because they longed to settle in Israel. Only about 4,300 Jews remain there today, mostly in Morocco and Tunisia […]

And this:

Many of the Palestinians who fled Israel wound up stranded in refugee camps. Multiple U.N. agencies were created to help them, and billions of dollars in aid flowed their way. The Arab Jews, by contrast, were quietly absorbed by their new homes. “The Arab Jews became phantoms” whose stories were “edited out” of Arab consciousness […]

I think that the Israelis were right to bring these expulsions to the forefront of the debates with the Palestinians. A lot of people on both sides have suffered and it is a good thing that the plight of the Arab world’s Jews is now being highlighted. But now that this historical fact is being highlighted by the Israeli state in its negotiations with the Palestinians, will it do any good for the peace process?

The reaction by one of the Palestinian negotiators is telling: Continue reading →

“Gold and Money”

Brandon Christensen Current Events, Economics, History, Liberty , , , , ,

That’s the title of this piece in the Freeman by our very own Dr. Gibson. In it, he suggests:

Let’s turn down the heat a bit and look into some propositions about gold. That should lead us to some reasonable ideas about whether or how gold might return.

Indeed. I’m  tempted to copy and paste the whole thing, but just check it out.

PS I’ve been a very busy man lately, but I’ve got a bunch of almost-finished writings in the works. Stay tuned!