A local guy is hosting a discussion on Austrian economics and the current financial crisis, and he invited me to come and sort of keep things rolling smoothly. The common element is that everybody at this gathering is a Christian who doesn’t want the government taking more of his money. (I’m pretty sure it will be all men.) Anyway, he has been emailing reading material to everybody to prepare for it, and one of the guys passed along his review of Hazlitt’s Economics in One Lesson. The conclusion is something I heard quite a bit (in various forms) while at Hillsdale College, so I will have to think about the best way to address these concerns.
To sum up, I really enjoyed and profited from this book, and plan to read further on this topic from other writers of the Austrian School. That said, I don’t want to hold forth a generally glowing review without acknowledging that these guys do have their own blind spots and that those are not insignificant. As a Christian, I am bound to affirm that the fear of the Lord is the beginning of all knowledge and wisdom (Proverbs 1:7; 9:10; 15:33). That includes wisdom and knowledge in the area of economics. Through the mechanism of common grace, I believe that the Austrian Economists are generally right-on in their astute observations of how the economic aspect of the world works and are generally far less deluded than other competing schools of thought on the matter. However, their essentially secular viewpoint does leave them open to certain deceptions and shortcomings, the chief of these being the fundamental assumption that man is basically good and that his greatest problem is not sin but ignorance. In addition, I must also bear witness that true and enduring freedom and liberty—in all their various forms, including economic—are blessings that are only found in Jesus Christ. Any attempts to idolize individual freedom and liberty by abstracting them and attempting to construct a comprehensive worldview around them (e.g. Ayn Rand, a noted favorite of both the Austrian Economists and their Libertarian political chums) is just as much doomed to frustration, failure and wretchedness as any other false ideology.
As I explained in the comments, I haven’t been this excited for a movie since Star Wars Episode I. If Jar Jar Binks show up in this, I’m going to be really upset with Oliver Stone.
In this state of mind, I sent a polite email to Glenn Greenwald with the subject line “a fan who disagrees strongly with you on tea parties etc.” To his extreme credit, Greenwald not only answered me, but went back and forth twice. (That is far more than you’ll get out of me, unless you pay a consulting fee.)
Let me reproduce our last exchange, since it was the best. In response to my original point, GG asked me why all these protesters suddenly got so mad right after Obama was inaugurated. I replied:
It’s a good point, but my answer is: They’ve finally woken up. The tipping point of a single $700 billion injection into Wall St. was so ludicrous that people finally woke up out of their stupor.
Last point and I’ll leave you alone: We both agree that right now, millions of Americans are for the first time really MAD about what the federal government is doing. But they’re not political junkies, they don’t have well-thought out views the way you and I do. So they’re looking around for someone to help channel their frustration and above all, give them something concrete to do about it.
So in that void, you’ve got Glenn Beck and Rush Limbaugh coming in, saying, “I’m so proud of you folks. You are real patriots. Thomas Paine would have been proud. What you need to do, is march on DC on 9/12, and call your representatives and tell them to close the border and defund ACORN.”
At the same time, you’ve got Keith Olbermann, Jimmy Carter, Janeane Garofalo, and Glenn Greenwald saying, “You guys are a bunch of racist hypocrites. Stop whining about ‘oh I oppose socialist medicine.’ No you don’t. You know darn well you took your weekend off to to go to DC because you hate black people.”
Is that really the right way for you to play this? Is this the way to help the guys who are still locked up in Gitmo, and the people getting blown up by Obama’s cruise missile attacks?
In response–and I’m assuming he won’t mind if I quote him here–GG said:
I’ve never said the protesters are motivated by race. I’ve never said their anger is unjustified.
What I said is that their anger is WARRANTED, but is being misdirected and exploited by their leaders for purely partisan ends that have little to do with — and are often directly at odds with — the things they claim they’re angry about.
You’re generalizing about these protesters. Some are politically unsophisticated people who are angry — though I need a better explanation for why they weren’t angry during Bush — but many, many, many are nothing more than Rush-Limbaugh-listening Republicans angry because they are no longer in power.
I think we both did a good job venting. I judge our exchange a stalemate.
I thought this was pretty funny from a WSJ article about the collapse of the financial sector:
Like nearly 30% of Massachusetts Institute of Technology graduates in recent years, Ted Fernandez set his sights on finance. Though he majored in materials science and engineering, he was wowed by tales of excitement from friends who went to Wall Street.
But when he stopped by an investment bank’s booth at a job fair a year ago, it was eerily empty. The booth belonged to Lehman Brothers Holdings Inc., and the date was Sept. 18, three days after the 158-year-old bank filed for bankruptcy. Now Mr. Fernandez, 22 years old, is getting a master’s in engineering at M.I.T. and aiming for a career in solar-power technology.
“Undoubtedly, I would have gone into finance if the financial meltdown hadn’t occurred,” he says. “Now I won’t make as much money, but I can go home at night and feel good about what I do. That’s worth more than any amount of money.”
Interesting that Mr. Fernandez says he “undoubtedly” would have taken the high-paying job if it were available, but now that it’s no longer an option, he would rather save the planet. It reminds me of my decision to not become the world heavyweight champ. I don’t want to glorify violence.
Ah, I knew his perfect streak couldn’t last. In this post Glenn Greenwald tells us that all the people who are protesting the government lately are mere dupes of Fox News. If you want the full context, you have to read his post itself; there’s too much quoting of quoting going on for me to reproduce here in a coherent fashion. The quick version: GG quotes a NYT writer (Douthat) who compared the current right-wing anger to the furor over the 1994 crime bill, which contained funding for “midnight basketball” and the like. Douthat quoted GOP pollster Frank Lutz who said “Every day that the Republicans delayed the bill, the public learned more about it — and the more they learned, the angrier they got.”
Then GG says:
In other words, the 1994 fury over the crime bill was driven by the belief that the Clinton-led federal government would steal money from middle-class Americans and give it to “midnight basketball” programs, i.e., “welfare” recipients. The racial and class-war components of that fear-mongering campaign were manifest: Bill Clinton wanted to steal the money of “‘middle-income Americans playing by the rules” and transfer it to the inner-city…
In that sense, Douthat (and Luntz) are correct when they say: “That’s exactly what’s been happening now.” Just as was true for the 1994 crime bill, the right-wing fury over health care reform is motivated by the fear that middle-class Americans will have their money taken away by Obama while — all together now, euphemistically — “having someone else benefit.” And this “someone else” are, as always, the poor minorities and other undeserving deadbeats who, in right-wing lore, somehow (despite their sorry state) exert immensely powerful influence over the U.S. Government and are thus the beneficiaries of endless, undeserved largesse: people too lazy to work, illegal immigrants, those living below the poverty line…
This is the paradox of the tea-party movement and other right-wing protests fueled by genuine citizen anger and fear. It is true that the federal government embraces redistributive policies and that middle-class income is seized in order that “someone else benefits.” But so obviously, that “someone else” who is benefiting is not the poor and lower classes — who continue to get poorer as the numbers living below the poverty line expand and the rich-poor gap grows in the U.S. to unprecedented proportions. The “someone else” that is benefiting from Washington policies are — as usual — the super-rich, the tiny number of huge corporations which literally own and control the Government. The premise of these citizen protests is not wrong: Washington politicians are in thrall to special interests and are, in essence, corruptly stealing the country’s economic security in order to provide increasing benefits to a small and undeserving minority. But the “minority” here isn’t what Fox News means by that term, but is the tiny sliver of corporate power which literally writes our laws and, in every case, ends up benefiting.
Hey Glenn, why are you giving Fox News the right to define what the tea party people are mad about? And why do a NYT writer and a GOP pollster get to determine what the public anger right now is “like”?
In most of his posts, GG does a great job of thoroughly documenting the views of his intended target. In particular, he is great when he rips the heck out of inane talking heads who mindlessly repeat the latest talking points, even when polls and other objective measures show that these talking points are completely bogus.
So if GG wants to document that the people in the tea party protests don’t get that it was really Goldman Sachs and other investment bankers who benefited, he should, say, interview some of them, or give links to YouTube footage of the events. Maybe he can link to a comment board at Glenn Beck’s site where 70% of the comments say, “More money for Goldman but none for working moms!”
I am NOT saying that racial and class stereotypes are absent from all this. Of COURSE if you are a racist Republican, you are going to get really whipped up into a frenzy when the first black president presides over a deficit of $1.5 trillion and tries to take over health care.
Also, of COURSE Fox News and Dick Armey are going to try to tap into this outrage and mold it to their ends.
But so what? Those two observations don’t prove what GG and everyone else making these points think they prove. Obama really IS pushing fascism, if that term is to mean anything. And those tea parties were entirely opposed to BAILOUTS first and foremost. There weren’t signs saying, “No more food stamps!” or “End PBS now!”
Remember, the thing that really sparked the tea parties was Rick Santelli’s rant. He wasn’t mad about investment bankers, it’s true: He was focused on people getting their mortgages picked up by Uncle Sam. So it was largely middle-class people he was mad at. And the reason that so outraged people, was that they really understood the logic there; there was no plausible argument that, “The world will end if your neighbor doesn’t get bailed out of his mistake in buying too much house.”
Last point: The public was WILDLY opposed to the Paulson plan. So what the heck are Glenn Greenwald et al. talking about, when they say, “This is all just about a black man.” ?!?! People didn’t want that cracker Paulson giving $700 billion to his Wall Street buddies.
The feds went ahead and did it anyway, and people were fuming. But again, many modest Americans weren’t quite ready to storm the Bastille, because after all really smart guys were telling them that this just saved the world financial system. But then the car companies, and mortgage relief, and a $787 billion stimulus, and on and on.
Jeff Tucker found this:
A Great Honor
Anyone can write a bad article, but Robert Murphy of the Ludwig von Mises Institute argues that I really stand out:
Floyd Norris’s recent New York Times article on the greenback is hands down the worst economics article I have ever read. Not only is it jam-packed full of false history, but it uses the falsehoods to justify monstrous crimes, both in the past and present.
You can read the article here. The headline is:
Fiat Money: How Else You Gonna Kill 600,000 Americans?
If you agree with him, you might want to take advantage of this offer from the institute: An “End the Fed” mug is available for $10, down from $12.
As near as I can tell, they will even take fiat money.
Paultards,* unite! Norris’ comment box must be filled with objections to fiat money and mass murder!
* And I use that term in the same way that black people can call each other the n-word.
Now that I’ve been slowly draining money from you through my clever Google Ads campaign, I decided it’s time to give back to the community that made me rich and famous. I want to register with a “speaker’s bureau” so that people besides Mises Institute donors can enjoy my after-dinner talks. But in order for the bureau to understand just how much of a diamond in the rough they have stumbled upon, I need to send them a DVD with some of my greatest hits.
Do any of you folks know how to do this? I would send you a bunch of YouTube clips and other online video, and ask you to splice and dice them, and maybe put a screen with text before each one to explain what it was.
In the comments (or in email if you prefer) please let me know what this would entail and how much you would charge. Note I’m not asking this “as a favor,” tell me what I would have to pay to get, say, 5 DVDs of the finished product so that you and I would both feel good about the transaction.
Jeff Tucker alerts us to this Paul Craig Roberts piece where he declares:
What the US needs is a single-payer not-for-profit health system that pays doctors and nurses sufficiently that they will undertake the arduous training and accept the stress and risks of dealing with illness and diseases.
Now maybe you think I’m taking PCR out of context. Here’s more:
A private health care system worked in the days before expensive medical technology, malpractice suits, high costs of bureaucracy associated with third-party payers and heavy investment in combating fraud, and pressure on insurance companies from Wall Street to improve “shareholder returns.”
Despite the rise in premiums, payments to health care providers, such as doctors, appear to be falling along with coverage to policy holders. The system is no longer functional and no longer makes sense. Health care has become an incidental rather than primary purpose of the health care system. Health care plays second fiddle to insurance company profits and salaries to bureaucrats engaged in fraud prevention and discovery. There is no point in denying coverage to one-sixth of the population in the name of saving a nonexistent private free market health care system.
The only way to reduce the cost of health care is to take the profit and paperwork out of health care.
To be perfectly honest, I have no idea what PCR is actually saying in this article. Is he “for” government health insurance / care? I don’t know. I can’t see how you’re going to get a single-payer without some serious coercion from the feds, but naturally PCR doesn’t focus too much on that; he just explains why everybody else opining on this topic is immoral and/or dumb. His arguments in this piece are similar to the debates we had over outsourcing.
Bob: Yes Dr. Roberts, I get it, you don’t think Ricardo’s argument about comparative advantage still holds in a world with mobile capital. OK, so are you saying you are for tariffs or capital controls?
PCR: No I never said that.
Bob: OK then what are you saying?
PCR: I’m saying Bush is in bed with multinational corporations who are screwing workers in the name of profits.
Bob: Okaaay, but is your newfound thinking on free trade causing you to change any of your policy recommendations? Now that the standard argument for free trade is shattered, what do you want to do about it?
PCR: I want to keep writing articles explaining how evil George Bush is, and how stupid libertarians are for thinking we have free trade.
And check out this: