Month: September 2009

Repeating the 1930’s in their entirety

Barack Obama and the Democrat leadership seem hell-bent on reinforcing and extending the very government policies that made the Great Depression worse[*1] , prolonging it by seven long years.


“Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump,” said Ohanian, vice chair of UCLA’s Department of Economics. “We found that a relapse isn’t likely unless lawmakers gum up a recovery with ill-conceived stimulus policies.”

An increasing number of economists are warning of going down the old, tired, destructive, dangerous statist road that has lead us to this crisis in the first place. The latest are Charles K. Rowley and Nathanael Smith, who have published a a monograph titled Economic Contractions in the United States: A Failure of Government[*2] .

The monograph has been endorsed by Nobel Economics Prize winner James Buchanan, who is quoted in the UK’s Telegraph[*3] newspaper:


“We have learned some things from comparable experiences of the 1930s’ Great Depression, perhaps enough to reduce the severity of the current contraction. But we have made no progress toward putting limits on political leaders, who act out their natural proclivities without any basic understanding of what makes capitalism work.”

How’s that stimulus working out for you?

So you’re still naive enough to believe the New York Times?

Mark Steyn[*1] :

Speaking of The New York Times, Jonah, in my weekend column I noted my rare appearance in its august pages (well, okay, September pages):

Mark Steyn, a Canadian author and political commentator, speaking on the Rush Limbaugh show on Wednesday, accused Mr. Obama of trying to create a cult of personality, comparing him to Saddam Hussein and Kim Jong Il, the North Korean leader.

Tim Blair, the great Australian wag, has a round-up of those hardworking types at other publications whose concept of journalism begins and ends with seeing what’s in The New York Times and passing it on. Tim missed a few, like The Sacramento Bee:

On Wednesday, Canadian-born writer Mark Steyn said on Rush Limbaugh’s nationally broadcast radio show that Obama’s ambitions to create a “cult of personality” were similar to those of North Korean dictator Kim Jong Il or former Iraqi strongman Saddam Hussein.

And The Las Vegas Sun:

The New York Times quoted Mark Steyn, filling in for conservative radio demagogue Rush Limbaugh, as saying Obama was trying to create a cult of personality like Saddam Hussein or North Korea’s Kim Jong Il.

“Quoted”, eh? Actually, if you read the Times piece – by two reporters, no less – the striking feature is that there’s no direct quote, is there? Not to worry. It’s even been picked up overseas. Lara Marlowe in Ireland’s newspaper of record, The Irish Times:

First prize for lunacy goes to Canadian commentator Mark Steyn, who accuses Obama of trying to establish a “personality cult” like Saddam Hussein or North Korean leader Kim Jong-il.

And first prize for laziness goes to Irish commentator Lara Marlowe. For the record, here’s the only thing I actually said about Kim and Saddam on Wednesday’s Rush show:

Obviously we’re not talking about the cult of personality on the kind of Saddam Hussein/Kim Jong-Il scale.

War is peace. Freedom is slavery. Ignorance is strength. We have never been at war with Eastasia. We have always been at war with Eastasia.

If you believe the New York Times or any of its sycophants throughout the world’s media about anything politics-related, then my friend you’ve been drinking too much Victory Gin.

Big Brother is watching you[*2] .

Power in the people

Gary Galles at the Ludwig von Mises institute posts these select quotes[*1] from the 1949 book Power in the People by Brookings Institution scholar Felix Morley.

And all I can say is amen to all of this–I really should save them all and make them Thoughts for the Day for the next month or so.

Maybe I will. But if you have ADD or are really bored, here they are, all in one bunch. (After the “read more” but well worth your time.)

This Republic is grounded on the belief that the individual can govern himself.

A political system designed to encourage people to govern themselves is increasingly distorted in order to subject them to remote administrative dictation.

The founders certainly believed, and frequently asserted, that the primary purpose of government is to secure private property.

The Constitution of the United States sets specific limits to the power of government so that the latter may not repress the individual characteristic of liberty.

We may awaken to find that a government established to secure the blessings of liberty has actually produced…tyranny. Indeed, that…outcome is wholly probable whenever democratic processes place representative government in the hands of men willing to exploit ignorance in order to further the centralization of power…

It is impossible to read even the bare text of the Constitution at all carefully without realizing that the American Republic was specifically designed to safeguard individual enterprise against the state.

Concentrated political power is, and continuously should be, suspect by those whom it subjects.

Any system of government cherishing the individual should make allowance for many conflicting viewpoints and should not impede their voluntary adjustment. The only workable alternative to a governmental system that encourages agreement is one that in encourages repression. And the latter, no matter how fair its initial pretense, is in nature, and will therefore eventually become in action, a system of tyranny.

Self-government is the very heart and core of the American way of life … the dominant emphasis was on self-government rather than on imposed government; on the development of Society, not on the aggrandizement of the State.

The real sources of American strength…[rest] on the belief that the individual is at least potentially important, and that he fulfills himself through voluntary co-operation in a free society. This belief implies an instinctive hostility to the State—an agency created to discipline society and with a consequent tendency to assume the direction of all social functions.

The issue stands out clearly. Shall man be subject to the authoritarian State or shall he restrain State powers to the minimum necessary for an orderly Society?

In America the individual, retaining sovereignty, intended to fulfill his destiny through a free Society, holding the State in leash.

Although the democratic ideal encourages individualism, the actual operation of a democratic system produces a centralization of power hostile to self-reliance.

Arbitrary power in a democracy may be just as great a menace to liberty as the outright tyranny of a dictatorship.

The survival of the Republic is not endangered by weakness in the central government, but by popular pressure for its aggrandizement.

The State, in short, subjects people; whereas Society associates them voluntarily.

Man…is now exchanging membership in Society for servitude to the State.

The development of the State has been that of constant aggrandizement. Necessarily, that aggrandizement has been…at the expense of Society and of the individuals who create Society…

Power it has, and force, and techniques to make its commands effective…But since the State has no conscience, and is primarily a continuing mechanism of material power, the human welfare side of State activity should blind no thoughtful person to its underlying menace.

Americans have…largely ceased to reflect upon the implications of the unconditional surrender of power to political government…wholly contrary to the principles of the Republic …

Power in the hands of the State is less inhibited morally and more destructive physically than in Society.

State power, no matter how well disguised by seductive words, is in the last analysis always coercive physical power…As we come to recognize that the State is the repository of coercive power, and by its nature works ceaselessly to enlarge that power, much that seems shameful and senseless in the world today becomes intelligible…

A person who maintains that the State should solve, by necessarily coercive methods, any problem that individuals are capable of solving voluntarily, is…the very opposite of a liberal. The essence of tyranny is reliance on external, as opposed to internal, compulsion.

Remember that true liberalism insists on protecting the individual from tyranny of every variety, and that tyrannies are almost always imposed…by democratic means.

As State controls become more plausible, more far-reaching and more effective, the tendency of democracy is to succumb to the demagogue becomes ever more pronounced.

The American tradition is of course completely opposed to authoritarian government … The American conviction is that the ‘Safety and Happiness’ of the governed takes precedence over every governmental prerogative and that deference is not necessarily owing to those temporarily in a position of political command.

Encroachment on the rights of others is not prevented by withdrawing the power to encroach from individual hands and vesting it in government bureaus.

The American theory is that every man has within him the potential to make a significant contribution of some kind to human welfare. Therefore every minority…must be protected against the ever-possible tyranny of mass opinion.

Exalting the State is steadily to augment its physical power at the expense of Society. The more that power can be concentrated, the more perfect the State becomes as an instrumentality of suppression in the hands of those who believe in suppression…

Only one form of government can nurture liberty, and that is personal self-government.

The distinguishing characteristic of American civilization is the subordination of centralized power in behalf of individual liberty.

The market does not become more humane under the direction of the amoral institution that we have seen the State to be.

To transfer power to the State…serves only to monopolize power in wholly irresponsible hands…

The tendency of the American people to turn to political authority for the solution of their economic problems was tragic…because there is no solution…in this fancied remedy…once a people are lost in the recesses of this blind alley, they will learn that it is almost impossible to find a way out.

Enlargement of the area of State authority therefore does not enlarge, but definitely contracts, the condition of economic freedom…this false god over every form of social organism is enormous and devastating.

One should not require personal experience with ration cards and queues and bureaucratic bungling to appreciate the practical superiority of the free enterprise system over any form of State-directed economic planning.

Social legislation is a sign of retrogression, not progress. It should be obvious that there has been widespread individual failure if humanitarianism has to be enforced by disciplinary governmental action.

Social strength can be diminished by a constant centralization and enlargement of governmental functions, the great majority of which are unproductive and…weaken the economic basis by the cumulative effects of regulation and taxation.

There are many Americans who attest their willingness to accept political dictatorship, if the State will only furnish them with periodic handouts and otherwise show continuous benevolence in the ordering of their lives.

The reformer…is usually disposed to believe that improvement can be imposed by government fiat…placing great confidence in the coercive power of the State.

The one enduring political folly is to concentrate in the hands of ambitious men power that they do not have the restraint to exercise wisely.

Nothing that advances the power of the State over Society, thereby subjecting the individual to the State, can properly be called liberal.

The most that any government can do is set people ‘at liberty.’ The State can stabilize the condition of freedom, and that is its sole excuse for being…men must develop their liberty from within. It cannot be doled out by government agencies.

A good idea from Obama?

A broken clock is right twice a day, I suppose. I’m sure the actual proposal will do just the opposite, but this Reuters story[*1] reports that President Obama might just have stumbled into a good idea:

Obama, in his weekly radio and Internet address, said the government would enact rules making it easier for small businesses to let workers automatically enroll in Individual Retirement Accounts (IRAs) and 401(k) retirement plans.

Of course, if individual accounts and investment plans are a good idea for retirement, why aren’t they good ideas for the foundation of the long-term funding of individuals people’s health care?

Opportunity Cost

The Heritage Foundation:

Government expenditures are not free. Economists know this and most others recognize it when they take the time to think about it. Unfortunately, it seems not everybody takes that time.

In a story fit for satire in The Onion, a renewable energy research group, bankrolled by a $1.1 billion subsidy from the Department of Energy, concludes that huge government subsidies for renewable energy don’t reduce employment after all. However, their reasoning works only so long as the subsidies don’t come out of anybody’s pocket—a practical and theoretical impossibility.

Two environmentalists at the Alliance for Sustainable Energy, LLC (see ASE brag about the billion it gets from Uncle Sam, here [*1] ) on contract to the National Renewable Energy Labs authored a research paper that tries to undermine the widely circulated research from a Spanish think tank.

The Spanish research, directed by economist Gabriel Calzada, at King Juan Carlos University, analyzed the subsidized expenditure necessary to create the green jobs in Spain. It compared those funds to the private expenditure needed to support the average conventional job. Supported by other data as well, they conclude that each subsidized green job in Spain eliminated over two conventional jobs.[*2]

Emphasis mine. Hey, a two for one deal! Oh, wait, it’s a one for two deal? Hmm. That’s not quite gonna “save or create” a jillion jobs now, is it?

“Opportunity cost” is a really, really simple concept. It’s what you can’t buy when you spend money on something else. Spending wisely generally means minimizing the opportunity cost–meaning what you are spending money on is the “best and highest use” of the money you can find. Spending stupidly generally means that you are getting less for your money than the money would otherwise be worth.

Destroying two jobs to create one is a perfect example of spending money stupidly. We should not do this.

Unless your goal all along is to destroy Western industrial civilization. At some point, you have to wonder . . .