Is Fox News Evil or Stupid? Jon Stewart Investigates
In the comments, NOTAL tips us off to this hilarious Daily Show clip where the crack team at Fox “follows the money” regarding the Ground Zero Vicinity Almost Mosque.
| The Daily Show With Jon Stewart | Mon – Thurs 11p / 10c | |||
| The Parent Company Trap | ||||
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Incidentally, I wanted to be sure the Fox team was as dumb (or evil?) as Stewart et al. were implying. But yep, the guy who tried to give Giuliani $10 million after 9/11 was indeed Saudi Prince Alwaleed bin Talal, who is also head of the Kingdom Holding Company.
And who also owns a nice chunk of Fox News, at least since 1997.
Tom Woods Throws Down the Gauntlet
Bob Wenzel passes along Tom Woods talking about book sales:
Having been doing this for a number of years now, I’ve come to expect sales to be at about this level. I realize it’s extremely difficult to sell in excess of 50,000 copies of a nonfiction title, which I have so far managed to do three times (my book on the Catholic Church and Western civilization being the third). But when you tell people the real figures, they are (understandably) stunned and disappointed.
Oh man. I can’t wait to see Tom’s face when David Hasselhoff and I release our blockbuster, Böhm-Bawerk Made Bearable (here’s the cover art so far, but some of you with free time can probably come up with something better). I did most of the writing, but David will handle the European promotion. (The Hoff’s big in Germany.)
Two Men Enter, One Man Leaves: Murphy vs. Rosnick on Social Security
Another Public Square debate for you. (Here’s my lead-off essay, and then you can click through to the others from there.) If you ever wanted to read four essays on whether we should count the trust fund as legitimate–and still not have an answer at the end–then this debate is for you.
My favorite exchange:
Me:
Consider a silly scenario: Suppose an intern working at the Social Security Administration accidentally tips the drawer holding the trust fund notes into a paper shredder. She looks on in horror as $2.6 trillion in bonds issued by the U.S. Treasury are destroyed.
Naturally the intern’s boss is furious. He doesn’t know what to do, since the Social Security system is now $2.6 trillion poorer. They have nothing to sell off to cover their operating deficits.
On the other hand, officials at the Treasury Department are elated. Tim Geithner himself calls up the intern and congratulates her on reducing the national debt by $2.6 trillion. The incoming federal tax receipts that would have previously been used to pay the interest and principal on those outstanding bonds can now be spent on something else (or returned to the taxpayers).
But while one set of government officials is distraught while another is delighted, from the point of view of taxpayers, it makes no difference. They’ll still have to make up the $2.6 trillion gap either way.
Our hypothetical scenario illustrates the silliness of counting Social Security’s holdings of Treasury securities as genuine assets.
Then Rosnick:
Another argument is that the trust fund is irrelevant in any case because taxpayers “still have to make up the $2.6 trillion gap” if the bonds were put through the shredder by a careless intern. On this we agree: The physical presence of the bonds means nothing. When was the last time a bond trader actually held an actual paper bond? Is there some poor bike messenger every business day tasked with the receipt and delivery of billions of dollars in stock certificates? What of the trillions of dollars in currency exchanged every trading day?
It is unfortunate that Murphy might be unaware—or worse, pretend not to know—that if one can establish ownership of a lost savings bond, the government will simply issue a replacement. On the other hand, a good fantasy might give ordinary workers the idea that the trust fund is a fragile thing—easily lost—and the best thing to do is to get used to the idea of getting along without it.
Point taken. And come to think of it, who ever heard of a talking pencil?! Man these free-market writers are either idiots or liars.
I am too lazy to verify this, but I think Rosnick makes a huge mistake when he says:
The Congressional Budget Office predicts that the projected seventy-five-year shortfall in Social Security is less than one-half of 1 percent of GDP over that time—the equivalent of $70 billion today. By comparison, extension of the Bush tax cuts (not including an AMT fix) would cost $116 billion in 2011 and $221 billion in 2012.
What he is implying in the above quotation–and which he explicitly says in the final essay–is that Congress could completely solve the Social Security crisis just by removing the Bush tax cuts for a single year.
As I say, I think this is completely wrong, but I’m too lazy to actually run the numbers. If you click on the CBO report, they certainly don’t say that the Social Security actuarial gap is only $70 billion in present dollars. No, as I point out in both of my essays, the government actuaries say Social Security has a PDV of minus $7.7 trillion.
So I think what Rosnick did is take the CBO’s projection of the shortfall (over the next 75 years) as a fraction of the economy (over the next 75 years). Then to give us an idea of what that number means, he expressed it in terms of current dollars.
If it were really true that $116 billion in 2011 could plug the Social Security gap (at least for the next 75 years), then it would be pretty weird for the Treasury to say the system currently had a $7.7 trillion PDV in unfunded liabilities, right? I mean, whatever happens out beyond year 75 is already being heavily discounted, so that’s presumably not serving as the lion’s share of the $7.7 trillion figure.
I always get a little tripped up with these types of things. For example, is Rosnick’s error (assuming it is one) dependent on the relation between the discount rate we use in these calculations, versus the average growth rate of real GDP? Discuss.
Potpourri Lite
In the next few weeks, I am going to be posting very sparsely because of the online class on private law & defense. (I owe my online arguing time to paying customers, not to you freeloaders.) So only two quick links for ya:
* Steve Horwitz aptly evaluates Paul Krugman’s approach to macro: “It’s a model with no price level, no time, and no capital. It’s the worst of Keynesianism in one picture.”
* Andrew Leonard at Salon favorably quotes to Martin Wolf who said this about proposals to default on the federal government’s debt (and thereby limit Leviathan):
This is extraordinarily dangerous. The danger does not arise from the fiscal deficits of today, but the attitudes to fiscal policy, over the long run, of one of the two main parties. Those radical conservatives (a small minority, I hope) who want to destroy the credit of the U.S. federal government may succeed. If so, that would be the end of the U.S. era of global dominance. The destruction of fiscal credibility could be the outcome of the policies of the party that considers itself the most patriotic. In sum, a great deal of trouble lies ahead, for the U.S. and the world.
Who would have thought that the “liberals” at Salon would shudder at the thought of ending the “U.S. era of global dominance”?
Separation of School and State
[Editor’s Note: This begins a series of short blog posts that I am writing as part of an ad campaign to bolster interest in the Mises Academy among homeschoolers. Regular Free Advice readers will see that these posts–which will run over the next three weeks–are aimed at a much broader audience.]
Today my wife and I met with our son’s kindergarten teacher. We are sending him to a pricey private school, but we think it is worth it. It’s not a status thing; this school really offers an environment we think will be great for our son.
It later occurred to me that sending a child to school is one of the most personal and serious decisions a family can make. For all the reasons that Americans strongly believe in separation of Church and State, they should also endorse separation of school and State.
On spiritual matters, the basic civil bargain runs like this: I promise not to use the force of law to make you (pretend to) believe in my religion, so long as you promise not to do the same to me. My freedom of conscience is very important to me, and I would never want to risk losing that in a society where the majority can enforce its religious views on the minority. I say this, even if my religious views are currently in the majority.
The same ought to hold for schooling. Even though I am a born again Christian, it would offend me if the government passed a law saying every child had to read the Bible, and go to church. But by the same token, it offends me that politicians dare to pass laws saying which biology and mathematics textbooks my child must read, and that he must go to school for a large portion of his life.
Whatever argument the modern American liberal could use to defend government intervention in schooling, could also be used to defend government intervention in religious matters. Of course it would be awful if the vast majority of parents were fools and didn’t educate their kids. But by the same token, it would be awful (in my mind) if the vast majority of parents raised their kids to believe there was no God, and that all of the universe in its majesty is really just a big coincidence.
It would be one thing if the government did a good job in the area of schooling. But of course, it fails miserably here too. That is why so many parents have embraced the homeschool movement, because it is the only way to protect their children from State-engineered propaganda.
For a superb analysis of the free market versus the government in matters of education–and note that education is different from schooling–see Murray Rothbard’s “Education: Free and Compulsory.”
What Does “Debt-Based Money” Imply for Interest Payments?
Not as much as some think:
In a previous article, I explained the sense in which our fractional-reserve, fiat financial system is built upon debt-based money. In this perverse arrangement, new dollars come into existence through the creation of government and private debt. Going the other way, if the private sector and the federal government ever began seriously paying down their debts, the supply of US dollars would shrink.
These observations are not common in Austrian economics, but they are discussed quite frequently in radical critiques of banking and “money-changing” per se. (For a great presentation, watch this video from 3:00 to 18:00.) Such critics claim that the charging of interest itself is unnatural. In the context of our present, admittedly perverse, system, these reformers argue that the people have to take on more debt, because “there’s not enough money in the economy” to pay back the principal and interest from their previous loans.
Although there is a grain of truth in this claim, in its crudest form it confuses stocks with flows. Although the critics are right to castigate our current system, they are wrong when they say that interest payments require a constantly growing supply of money.
Rand Paul Fundraiser Outside Nashville!
A guy I know (I think his house is in Franklin, TN–it took me about 30 minutes or so from Bellevue when I went there earlier this year) is having Rand Paul at his house to raise money for his campaign. I am not going to be in town then, but I told him I’d pass the word along. Here are the details:
Thanks for your interest and your offer to help with the Rand Paul fundraiser. It is on Thursday the 16th of September at 6 PM. It will include wine, beer, soft drinks and appetizers. Rand Paul will be here to meet and greet and give a short speech. We are requesting a donation of $500 per couple.
I don’t want to blast this guy’s info out to all 3.2 million Free Advice subscribers, so if you are seriously interested in attending, shoot me an email and I’ll tell you more.
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