The Brothers Austrian

Dr. Rand Paul, fighting for the revival of the Constitution.

http://www.randpaul2010.com/

Donate today, December 16th 2009.

Tomorrow, Peter Schiff, opens his campaign headquarters; hope to see you all there.

http://schiffforsenate.com/

Wendall Wilkie Politics money bomb, Peter Schiff, Rand Paul

RJ Tweeted this earlier today. The end of the video lists some little known politicians running campaigns with libertarian tint.

Wendall Wilkie Politics, Uncategorized RJ Harris, RJ Harris 2010

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

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 Forgotten Man, a popular essay by William Graham Sumner.  The idea of which was used by Hazlitt and even by Amity Shlaes in her recent book on the Great Depression.  Sumner’s work, penned in 1883, is all too relevant today:

In hard times, insolvent debtors are a large class.  They constitute an interest and are able to attract public attention, so that social philosophers discuss their troubles and legislatures plan measures of relief.  Insolvent debtors, however, are an insignificant body when compared with the victims of commonplace misfortune, or accident, who are isolated, scattered, ungrouped and ungeneralized, so are never made the object of discussion or relief.  In seasons of ordinary prosperity, persons who become insolvent have to get out of their troubles as they can.  They have no hope of relief from the legislature.  The number of insolvents during a series of years of general prosperity, and their losses, greatly exceed the number and losses during a special period of distress.

Indeed these are the forgotten men, of as Sumner corrects, the man who is never thought of.

Who are the forgotten men of 2009?

Teacherman Interventionism, Politics great depression, Hazlitt, william graham sumner

My brother has posted a few times lambasting the higher education system, especially at the elite level, for propagating a broken economic system.  Worse, their temerity leads them to believe that they can diagnose and fix macroeconomic systems.

The seminal work underpinning my brother’s revulsion is The Pretense of Knowledge, by Friedrich A. Hayek.  This is the name given to a speech by Hayek in 1974 in a lecture to the memory of Alfred Nobel.  In it, Hayek explains the limits of human knowledge, especially in relation to the infinite variables of a macroeconomic system.  As he says, “Unlike the position that exists in the physical sciences, in economics and other disciplines that deal with essentially complex phenomena, the aspects of the events to be accounted for about which we can get quantitative data are necessarily limited and may not include the important ones.”  Nevertheless, political economists tend to use rigid formulas, in a manner like the physical sciences, to analyze highly fluid macroeconomic settings.  Hayek notes, “Yet the confidence in the unlimited power of science is only too often based on a false belief that the scientific method consists in the application of a ready-made technique, or in imitating the form rather than the substance of scientific procedure, as if one needed only to follow some cooking recipes to solve all social problems.”

The inane pretense of the Federal Reserve and the Obama (and Bush, etc) administration that they have the knowledge to manipulate the monetary system without consequence is absurd. 

But when it doesn’t work, we can just blame the ‘free market’ — right?  Talk about moral hazard…

Teacherman Federal Reserve, Interventionism, Politics Federal Reserve, hayek, macroeconomic, monetary system, pretense of knowledge, sciece

The Obama administration took steps over the weekend to reassure the Chinese government that its investment in US treasuries was sound.  The Chinese primier Wen Jiabao had shared his trepidation over the potential decline in the US dollar.  A former Chinese central bank advisor complained the administration’s reckless policies are eroding China’s investment in US treasuries.

We really have to stop and note the irony here.  We have a communist country chiding what is supposedly the world’s great bastion of capitalism on government spending.  Even more indicative of the situation is the clear power the Chinese government over this country, as the administration rushed to reassure the Chinese that all is well.  I doubt that China will dump its US treasuries en masse, but I think that this does signal that the credit gravy train for the US government may be coming to an end, let’s hope so anyway.  Admittedly, all signs up until now have pointed to the contrary as China has continued to gobble up treasuries in recent months.  There perhaps is some false hope that China’s reluctance to purchase US debt will keep government spending in check.  Ok, fine, keyword false.

Teacherman Government Spending, Inflation, Politics capitalism, china, communist, obama, treasuries

Jobs, Jobs, jobs politicians say. We must put the people back to work, however this is only temporary they say. Merely to fill the “gap” left by the private sector, but I would put this question to President Obama, whats your exit strategy? What jobs will the government provide that can be seamlessly absorbed by the public sector when the crisis is over?

Does the government have the foresight to train employees in area’s of business that the private sector will deem to be viable and productive in the future? Once the government builds their bridges and railroads where do the employees go from there? If the government can figure this all out maybe they can give me some stock tips while they are at it. I mean we all know how the government is a viable, efficient, and profitable entity that can balance a budget, so we will be ok, right?

Again, I don’t think that the government has an exit strategy for this mess. Once they start putting people to work it will be awfully hard (politically) to lay them off and let the private sector try to absorb them. These former government employees will not be trained in the skills they need to be useful in the private sector and they will continue to demand unsustainable wages. The government will succumb because ultimately these employees vote. This in turn will in turn increase the velocity of our country’s downward productivity spiral.

If the government wants to stimulate, I say pour money into mathmatics, science and law enforcment. Perhaps upgrade our rail system but thats it. Let prices come down, let banks fail, and watch productivity go up.

Wendall Wilkie Government Spending, Interventionism, Politics employment, government, jobs, obama, private sector, stimulus

On the Borderline, notes the sick twisted irony of President Barack Obama’s stem cell message earlier this week.

“Promoting science is about letting scientists like those here today do their jobs, free from manipulation or coercion, and listening to what they tell us, even when it’s inconvenient – especially when it’s inconvenient.”

Right, now clearly every Austrian is jumping up and down saying, “that’s it you buffoon … How can someone so intelligent be so incredibly obtuse!”

Of course, the Austrian point wouldn’t be to dump federal money into research institutions, but to allow the market to sort out our current economic troubles, even when it’s inconvenient.

As Hazlitt demonstrates, it is rather ‘inconvenient’ for the politician to perform economics appropriately.  For to do that, he must look not just at the immediate effects of his policy, but also the long term effects.  He must review not just how this policy will affect one group, but he must look at its effects on all groups.

If politicians were to do this, the answer would likely be quite ‘inconvenient.’  Much as it is, apparently, terribly inconvenient to apply one principle to multiple situations.

Teacherman Politics Hazlitt, obama, politicians, stem cell

In case you missed this classic story in the news yesterday, Secretary of Education is encouraging local school districts to spends the stiumlus money fast (emphasis added).

The Department of Education’s ‘five-page guidance’ manual actually says, “Spend funds quickly to save and create jobs…”

I was thinking of some more appropriate endings to that statement, here’s my top 5:

1) Spend funds quickly to ensure there is nothing left when the dollar becomes worthless.

2) Spend funds quickly before Congress realizes cuts in education spending actually may improve school efficiency.

3) Spend funds quickly to let China know that we are putting its money to good use.

4) Spend funds quickly so we can hurry up and get some more!  This is way better than actual budget balancing!

5) Spend funds quickly before people realize that more money doesn’t actually mean better schools.

Teacherman Government Spending, Interventionism, Politics arne duncan, budget, china, education, stimulus