Granted there are many people who are here illegally which I do not like. However human beings will naturally seek to improve their lives which I must sympathize with as a student of praxeology. There is nothing wrong with trying to improve the well being of your family.

This law is a symptom of two failed government policies in my opinion: the war on drugs and the lack of a secure boarder.

1. Have really won the war on drugs or just caused more violence and health hazards (cutting of drugs with harmful agents as less slip by the various enforcement agencies)?

2. Why can’t we secure our boarders? We can move 200,000 troops into the Middle East in a year but we can’t build a wall a 1000 miles long?

I better see the 4 or 5 Republicans pushing for liberty come out strongly against this. I reiterate, I did not the leave the Republican Party, the Republican Party left me.

And why did Obama not mention the words freedom, or liberty when coming out against this?

I was recently having a conversation about insurance costs with a friend who is a senior at Rutgers University. Somehow the conversation digressed to the topic of Wal-Mart. The Rutgers student listed all the classic knocks on Wal-Mart: they treat their employees like a crap, pay them nothing, do nothing good for American manufacturing. This commentary sounded all too familiar. My freshman year at Syracuse University I had similar opinions of Wal-Mart after reading Nickel and Dimed.  My very first college paper was based on the book (man, if I could only find that assignment to post here). Nickel and Dimed is essentially a tale of how hard it can be to live off minimum wage and how companies exploit laborers … it’s modern day, The Jungle. After reading the author’s tale I had a classic case of rational ignorance. The story seemed to make a well researched “Wal-Mart is evil” argument, so was it really worth my time to find other sources on working life at Wal-Mart? The books thesis was in line with what seemed to academics a consensus view; at the time that good enough for me. About two years later I watched what I consider to be one of the best South Park episodes ever: Something Wal-Mart This Way Comes. Again…Wal-Mart… evil.

Fast forward 7 years to a time where I am more in tune with various economic schools of thought and viewpoints. I came a across a podcast on Econtalk with Russ Roberts in which he was interviewing a man who was retired editor. Roberts’ guest had decided to take up position at Wal-Mart and subsequently written various articles on his experiences (Life at Wal-Mart by Charles Platt). Here is a synopsis of the podcast:

Charles Platt, author and journalist, talks with EconTalk host Russ Roberts what it was like to apply for a job at Wal-Mart, get one, and work there. He discusses the hiring process, the training process, and the degree of autonomy Wal-Mart employees have to change prices. The conversation concludes with a discussion of attitudes toward Wal-Mart.

What Platt had to say seemed to make sense.  His points were further supported by Robert’s commentary on the general economics of Wal-Mart. I started piecing my Wal-Mart experiences together in my head. All in all, I would have to say I enjoy Wal-Mart. One stop shop, low prices, and great service. So, is there enough evidence that Wal-Mart exploits it labor for me to shun Wal-Mart?

The stigma is that Wal-Mart workers are treated like crap and are unhappy. After hearing about Platt’s experience, I now pay attention to the demeanor of Wal-Mart employees when I shop there. From my experience going to Wal-Mart, their employees, so far, have seemed pretty happy in general. Now, after reading Nickel and Dimed there were a few years that shopping there gave me the heaby jeebies but I didn’t shop there any less. There has always seemed to be some a disconnect, for me, between the experience that I read about in Nickel and Dimed and my personal experiences at Wal-Mart.

I would guess that good portion of recent liberal arts graduates have read some version of a “Nickel and Dimed”. I think Nickel and Dimed misses the human aspects of why people work at Wal-Mart, in other words, what their living situation before the enter employment with the company.  Therefore, it tends to mislead readers into believing that most other Wal-Mart employees dislike their job as much as the author of the book did. Certainly there are people struggling to get by that work at Wal-Mart, but is it right to pin the blame for their struggles on Wal-Mart? I think not. The Platt article may change your mind on Wal-Mart and it may not, but either way it is worth getting another viewpoint on the “Evil Wal-Mart” story that seems to so prevalent in university lecture halls across the country.

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.

“The chains of habit are too weak to be felt until they are too strong to be broken.”
–Samuel Johnson

U.S. consumption has driven global growth for years. South Pacific countries sold us their spare capacity which drove and modernized their economies at a seemingly unrealistic pace. Foreigners have been building dollar reserves for decades. Many of those countries have rightly realized that perhaps they should use those dollars to buy U.S. assets rather than hold treasuries. It is one thing to exploit foreign labor, but now foreigners have put their surpluses (their money/capital) to work buying up U.S. assets, thus exploiting us. Touché. Now, profits generated from the selling to the U.S. consumer go oversees rather than staying here.

The consumer was being squeezed on all sides entering into 2008. Higher fuel prices, falling housing prices, stagnant wages, higher unemployment, and rising food costs.

Household debt as a percentage of GDP is almost 100% as the below chart illustrates.

Pundits argued that rising household net worth would allow spending to continue forever and ever as net worth continued it climb in 2004, 2005 and 2006. Now household net worth is falling at an unprecedented rate. In 2008 household net worth declined an astounding to $11.2 trillion to $51.5 trillion (Random Factoid $trillion in household net worth vs. 600 trillion in outstanding derivatives in the U.S.).  In 2007, residential mortgages outstanding, in percentage terms   were equivalent to 78% of US GDP. In 2006 residential mortgages made up an outstanding 36% of total U.S. debt outstanding. When this crisis started in 2007 Gary Shilling said that we would need vacant supply to fall below 600k homes now he estimates that there currently are 2.1 million in excess supply. Shilling estimates that housing prices could fall anther 20% (ughh what’s that going to do to household net worth?).

A sad fact now apparent to most of us, the U.S. consumer is tapped and they are not coming back for years … not months. I am now realizing why the Fed has chosen to monetize this debt, clearly the people who have burrowed(or should I say lent…ah what the hell…both) can’t afford for the Fed not to.

Now let me get this straight…the Fed is going to buy back these mortgages via Fannie and Freddie, an issue treasuries to do so? Now the Fed is going to buy back treasuries (monetizing: printing money) to keep rates down so lenders can then make more loans to people who are insolvent? Meanwhile oil is walking its way back up the ladder towards $100 (granted I believe will break $40 once more) because oil is finite and fiat dollars are not. Food costs are not slowing the way they should if an economy is truly productive, wages are declining, productivity(…well is there such thing as productivity in Never Never land?) is declining and the government is scaring the entrepreneur back into his/her shell with taxes.

Jefferson is rolling over in grave as we speak.

Have you ever stopped to think about how much efficiently you could have learned something? Or what about when you realize everything you thought you knew was wrong? I am sure some very smart people were convinced the world was flat and were quite perturbed when learned the world was actually round. Well I would say I just realized everything that I had been taught/thought about the history of the U.S. was dead wrong.

At Syracuse University, as a history major, I was taught that it was Roosevelt’s quarterbacking in the 30’s that helped the U.S. recovery from the depression. I was essentially taught, like the rest of us, that fiat monetary system created by the Federal Reserve was necessary to provide the economy the “flexibility” to soften the blows that were supposedly considered a natural occurrence of the market (this is painful to think about). If you are reading the blog, you probably have had the experience that I had when I discovered the plethora of readings that come from what is known as the “Austrian” school of economic thought. My first reading was Economic Policy: Thoughts for today and Tomorrow. From there it all just snowballed for me. Hayek, Hazlitt, Rothbard. But honestly it really only took me about the first 25 pages of that first Von Mises book and I was hooked. Like I had discovered a new religion and that I was saved….and then I immediately felt as if I had been robbed.

I thought to myself, “How could I not have heard of this school thought…I was a double major.” One would think that if you majored in both political science and history that I would have come across this “Austrian” school of thought. This just did not make sense.

What I do realize is that history is written by the victors. America came out of the WWII the strongest nation which had seemingly won WWII (no one really won, everyone lost in my opinion). We had amassed an enormous amount of wealth throughout the 19th and early 20th century. Subsequently although Roosevelt was in charge during the majority of America’s most prolonged down turn he and his “brain trust” are viewed as saviors.

What’s my point? I honestly believe that Mr. Obama and Mr. Bernanke are two of America’s best and brightest, however their current “humanactions” are a mold/consequence  of their life experiences. Obama happened to attend a college that teaches its students to believe that they know better than the collective. They believe can smooth out market upheaval with their policies rather than recognizing its their policy  their school of thought that caused the problems.   What if Mr. Bernanke was scientist that could have cured cancer but he was instead taught that cancer can’t be cured but merely slowed down and then at very end of his life he realizes he could have cured cancer all along but he was taught it can only be slowed down.

This is my glass have full post. I will try not to succomb to the idea (at least not tonight) that this mess came about because politicians and other self interested individuals were/are trying retain their power through inflation and wealth redistribution.

]]> http://www.brothersaustrian.com/smart-people-wrong-lesson/feed/ 0 http://www.brothersaustrian.com/harvard-and-capitalism/ http://www.brothersaustrian.com/harvard-and-capitalism/#comments Tue, 17 Mar 2009 18:41:45 +0000 Teacherman http://www.brothersaustrian.com/?p=107 Mises has a post today that is somewhat tangential to an article that my brother wrote on the blog a few weeks ago.  This gist of the article about a anti-free market conference recently held at Harvard.  The goal of the conference, as Woods appropriately puts it, “Why do people still think the interaction of free individuals is a superior economic system to one directed by Harvard Ph.D.s like us?”

I’d really like to know from all of these free market bashers, what free market they are talking about?  The one where government facilitate subprime mortgages, pushed interest rates artificially low, regultes so-called ratings agencies, and monopolizes currency production?