The Brothers Austrian

The below respons was published on The Big Picture Blog in response to Not deflation but more disinflation should lead to QE2.

A 50 year long expansion in credit, which was helped along by securitization, has led the master builder dilemma on grand scale. The master builder dilemma occurs when entrepreneurs and consumers alike (metaphorically) think they have enough bricks to build a house. At some point they realize they don’t have enough bricks (pull back in lending) and have to  make some difficult decisions as to how they should not proceed. The builder thinks to himself, man if I had only known, I would have build my home a little smaller.

Currently master builders are confused. Do I expand my business? Do I build a home or do I rent? Do go back to school/get retrained or is my housing construction job going to come back? Do (corporations) buy back shares our build up cash? 

Some of the decisions will ultimately end in malinvestment due to the utter confusion that manipulated time preferences for money have caused (interest rates).

The US has not been a free market since the late 1800′s when the railroads went bust and the US was forced off its prior attempt fiat currency’s (the Greenback). I am a believer that we need quick forest fire (1920 recession) and not an ice age (the Great Depression). Monetarist’s and Keynesians prefer the ice age therefore Austrians are still out numbered. The Fed’s recency bias has falsely led them to believe they can manage us out of this crisis. Essentially the monetary authorities are saying they can manipulate us like puppets and control how we allocate our capital. Decades of false conclusions by the Fed have now culminated into another DEPRESSION. Now the bill is coming due. The question is how much of our liberty will used to pay?

MisesBeliever Deflation, Federal Reserve, Liberty

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

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