The Brothers Austrian

In response to a few postings by my brother, I am going to aggregate the four liberty loving candidates looking to come (back) to Washington after the 2010 elections.

Senate:
Dr. Rand Paul – Kentucky, still undecided, big announcement soon. May challenge Trey Grayson who will likely have establishment support in the GOP primary.
Website – Twitter

Peter Schiff – Connecticut, famous investor who predicted the economic meltdown from an Austrian lens in the face of ridiculing talking heads.
Website – Twitter

House:
Dr. Ron Paul – Texas’s 14th District, you all know him

Adam Kokesh – New Mexico’s 3rd District, no real GOP primary opponent yet.  Faces freshman incumbent Ben Ray Lujan.
Website – Twitter

RJ Harris – Oklahoma’s 4th District, taking on heavyweight Tom Cole in GOP primary.
Website – Twitter

Jake Towne – Pennsylvania’s 15th District, going it as an independent, “Simply put, I am for liberty. I hate war. I love life. And I have no fear.”
Website – Twitter

Dr. Mike Vasovski – South Carolina’s 3rd District, In a wide open GOP primary battle.  Seat currently held by GOP’s Gresham Barrett.
Website

Teacherman Politics, Uncategorized candidates, harris, kokesh, Liberty, paul, schiff, towne, vasovski

With talk of a second stimulus package already in the works, many are wondering who is going to pay for all of this?  Well, as William Graham Sumner famously said, it will be the “Forgotten Man.”  Well, certainly we will all have to pay for stimbailtarpitis, in some way or another, but it is the Forgotten Man who will pay the most.  This will likely come in the form of inflation.

As any good Austrian knows, inflation will hit the Forgotten Man (especially the poor Forgotten Man), first and hardest.  Many will counter and say, what about all of those people who got jobs from the stimulus package?  Well, yes, but they are not the forgotten ones.  If one were to take a cynical view they are merely the ones closest to those wielding influence over policymakers.  Nevertheless, they will benefit from the stimulus, but only at the cost of the rest of society.  As Henry Hazlitt eloquently explains, those who receive additional money (from the stimulus) will be willing to pay more for goods and services.  Anyone who understands basic supply and demand will agree with this.  Stimulus receivers now have more of something (dollars) and therefore each will inherently mean less to them.  This will lead to price inflation.

The Forgotten Man, however, is now stuck in an even worse situation.  Now, not only does he feel worthless for not getting stimulated, he also has a lower standard of living than before.  Why?  He did not receive an immediate impact from the stimulus, but higher prices stared him in the face shortly after the dole was passed out to his neighbor.  His standard of living will go down.

I will leave with a parting shot from Mr. Sumner.  Keep in mind how relevant this is and remember, he is writing in 1883, not 1983.

In all jobbery the case is the same. There is a victim somewhere who is paying for it all. The doors of waste and extravagance stand open, and there seems to be a general agreement to squander and spend. It all belongs to somebody. There is somebody who had to contribute it, and who will have to find more. Nothing is ever said about him. Attention is all absorbed by the clamorous interests, the importunate petitioners, the plausible schemers, the pitiless bores. Now, who is the victim? He is the Forgotten Man. If we go to find him, we shall find him hard at work tilling the soil to get out of it the fund for all the jobbery, the object of all the plunder, the cost of all the economic quackery, and the pay of all the politicians and statesmen who have sacrificed his interests to his enemies. We shall find him an honest, sober, industrious citizen, unknown outside his little circle, paying his debts and his taxes, supporting the church and the school, reading his party newspaper, and cheering for his pet politician.

Teacherman Inflation, Interventionism austrian, forgotten man, Hazlitt, stimbailtarpitis, stimulus, william graham sumner

In 1819 the Second Bank of the United States was a lightning rod issue in many states.  The bank was in shambles, as was the American economy.  Take a look at the following argument from McCulloch v. Maryland, we get the following oral argument from Walter Jones.  The Constitution did

not imply the power of establishing a great banking corporation, branching out into every district of the country, and inundating it with a flood of paper money.  To derive such tremendous authority from implication would be to change the subordinate into fundamental powers; to make the implied powers greater than those which are expressly granted; and to change the whole scheme and theory of government.

Of course this logic was rejected, sound familiar though?   Some may not understand the tremendous power grab Supreme Court Justice John Marshall took on behalf of the federal government when repudiating the above sentiment.  His sweeping opinion codified the implied powers clause as a broad offering of power to the federal government.  A tragic, if inevitable, day in American history.

Teacherman Federal Reserve, History bank of the united states, john marshall, mcculloch v maryland, walter jones

A while back President Obama asked his cabinet to cut $100 million in expenditures.   Most people laughed, but some lauded the measure in spite of its token size.

Now, we hear that an Obama supported plan to erase that savings by giving all Federal workers four weeks paid time off after the birth or adoption of a child.  This plan will cost $140 million.  That you can even propose such a ridiculous idea at a time like this is so incredibly maddening and it’s no surprise that I have major issues with this plan.

My qualms center on three main points: 1) four weeks is too long; 2) the employee sacrifices nothing; 3) government has no money for the program.  Of course, the most devastating impact of this legislation may come from the potential it has to set a precedent for future action (in the private sector).

Granted, this is one of many additional expenditures created since the cost cutting news spectacle, but I thought it was illustrative to show just how quickly those savings could be erased.

Teacherman Government Spending cabinet, expenditures, federal workers, obama, paid time off

The Obama administration told the American taypayer this weekend to just accept it.

First and foremost is the acceptance of General Motors bankruptcy.  The American taypayer now has an 60 percent ‘equity’ investment in the company.  Sweeet.

Next, and perhaps the president needed to pad his May expenses a little bit, but his excessive ‘date’ to New York City cost the American taxpayer a pricey penny.  How many press and media members needed to follow this ‘event’?  One, two, ten, one plane full, how about two planes full.  Just accept it.

I couldn’t believe how lame McCain’s celebrity ads were when he ran them during the campaign, but perhaps he was onto something….

Any ideas for what we’re to accept next.

Teacherman Government Spending, Interventionism bankruptcy, general motors, investment, mccain, obama, taxpayer

A headline on Bloomberg recently read: Dollar Is Dirt, Treasuries Are Toast, AAA Is Gone.  This not so surprising sentiment is the title of an opinion piece by Mark Gilbert on the investment news site.

Gilbert lays out three reasons why currency investors are starting to doubt the US government, after all why ‘pick on’ the dollar as he says: “These include the state’s pressure on Bank of America Corp. to buy Merrill Lynch & Co.; the priority given to Chrysler LLC’s unions over the automaker’s secured creditors; and the freedom that some banks will regain to supersize executive bonuses by giving back part of the government money bolstering their balance sheets.”

It’s sad, but I revel in seeing stories like this on such a mainstream, if niche, media outlets.  Will Obama Time Magazine ever run something like this?  Probably not.  A likely op-ed in the New York Times?  Not if it unmasks Krugman for the hack that he is.

As an aside: let’s make it clear … dollar is dirt and treasuries are toast, those things ring true to me.  Adding that AAA is gone means nothing.  Gilbert mentions that even a downgrade to AA makes the USA’s creditworthiness “very strong” — something that is laughable.  Standards and Poor’s ratings are as worthless as the Nationally Recognized Statistical Rating Organization and the Securities and Exchange Commission that props them up.

Teacherman Government Spending, Politics bloomberg, dollar, krugman, mark gilbert, ratings, standard and poor's, treasuries

The title of this posting refers to Cato’s Letter Number 4, by Thomas Gordon. Writing in 1720, Gordon notes the importance of restoring the credit markets in England, but bemoans the idea “that any thing ought to be done to repair the losses, occasioned by folly and covetousness, out of the estates of those, who always foresaw, who always opposed this mighty mischief; much less at the further expence of the honour and trade of the nation.”  Gordon actually calls for the “necks” and “money” of those responsible for the crisis, today it is the calls of the Austrian School for bankruptcy.

Very good Mr. Gordon, you just became relevant in the 21st century. Cato’s Letters (written by Gordon along with John Trenchard) represent some of the most influential 18th century political theory. Murray Rothbard mentions Gordon and Trenchard along with Algernon Sidney and John Locke as the most influential libertarian leaning philosophers during colonial times. But in Cato’s Letter Number 4, we see more than the ideological origins of our founding fathers. We see a true understanding of macroeconomic policy that made people like Ludwig von Mises and Henry Hazlitt shake their heads at the missed historical lesson in the macroeconomic policies of the early 20th century.

Again, to Gordon, “If our money be gone, thank God, our eyes are left: Sharpened by experience and adversities we can see through disguises, and will be no more amused with moon-shine.”

Or so we hope…

Teacherman Uncategorized algernon sidney, austrian school, cato's letters, colonial, henry hazlitt, john locke, john trenchard, libertarian, ludwig von mises, murray rothbard, thomas gordon

Many people that I discuss liberty with have a really difficult time understanding the concept in the abstract.  One of the best explanations of liberty in the Austrian/libertarian tradition was put on YouTube by Free Talk Live.  It is worth watching the entire eight minutes.  Enjoy!

Teacherman Liberty austrian, libertarian, Liberty, philosophy

This mission is for Obama guys!

In case you missed it, there was some hulla balloo in downtown New York City Monday when the federal government sent Air Force One (along with its paparazzi) on a secret mission.  It seems like the secret mission included a photo op flyby of the Statue of Liberty.  The planes logically took a path most similar to the ones taken on 9/11.  Genius.

Like any good Austro-libertarian I asked myself if a private company, say XYZ Company, would have the hubris to complete such a mission.  In all honesty you know what, perhaps it would.  It’s impossible to know for sure.  One thing that we do know is that there would be immediate backlash from potential consumers of XYZ Company.  In other words, they would be accountable.  In this case, however, other than some trumped up anger from the president (and likely a fired employee), the government will go unscathed.  After all. what can we really do?

To top all of this off, the government spent $328k on this folly.  That should sicken each and every one of you.  As Federal Reserve inflates our money supply by the trillion, the same government still has the pretense to send Airforce One on this special mission.  Can’t say I’m surprised.

Teacherman General, Government Spending 9/11, airforce one, Federal Reserve, government, money supply, obama

David Adolf Axelrod

Senior White House advisor David Axelrod apparently thinks that some manifestations of the first amendment are healthy and others are not.  On the recent Tea Party Protests Axelrod said, “I think any time you have severe economic conditions there is always an element of disaffection that can mutate into something that’s unhealthy.”

Wow, this sounds incredibly familiar.  In 1919, Attorney General A. Michell Palmer, using J Edgar Hoover as a proxy, employed similar sentiments to enact a series of raids on political dissidents.  “There could be no nice distinctions drawn between the theoretical ideals of the radicals and their actual violations of our national laws,” Palmer claimed in 1920.

In the ‘Palmer Raids’, Hoover targeted mostly communists and anarchists.  In 1919, they rounded up 249 citizens, including Emma Goldman and Alexander Berkman, and sent them ‘home’ (to Russia) aboard the Soviet Arc. The next year over 6,000 were arrested in a raid against the radical IWW workers union.

Now in all fairness, some of these raids were in response to a series of bombings (not simply ’severe economic conditions’ – though government inflation was causing a severe recession after World War I).  Perhaps Axelrod does not believe in instituting the Holder Raids, but his statement does indicate a generally dismissive and arrogant tone toward dissenting voices.

High ranking government officials, simply through veiled statements, can influence how ordinary Americans interact.  Axelrod’s ‘unhealthy’ could be translated by some boob into shunning the tea party protester.  Get a few boobs together, all fearful of ‘unhealthy’ dissent, and you have a de facto suppression of speech.

Teacherman Liberty 1919, alexander berkman, attorney general, david axelrod, emma goldman, j edgar hoover, palmer raids, soviet arc