Wednesday, January 30, 2008

Text-bite: George Phillies on anti-environmentalists

From his campaign's statement on energy and the environment:

Attacks on scientific global warming observations have substantially passed their time. Many attacks are a political waste product, resulting from 1970s feuds between Republicans and environmentalists over air and water pollution. The feuds are so ingrained that they are being recycled.

I've felt for several years like a lone-gunman in the libertarian movement. Many old libertarians have had Patrick Michaels and Fred Singer whispering in their ears for so long that they come from a different planet, where climatologists are so incompetent as to neglect solar effects, concern for the environment is a socialist ploy, and the anthropogenic global warming thesis simply Must Be Wrong: liberty depends on it. One, of late, said that talk of biodiversity loss was "eco-theology".

How can I even have an intelligent discussion with someone so ignorant, who has had at least eighteen years to learn why scientists and the educated public find such things of concern, but simply hasn't bothered? Worse still, the man's a PhD economist!

Thanks to one of the frontrunners in the LP race, or at least a well-informed campaign staffer, for easing my burnout, if only momentarily.

Wednesday, January 9, 2008

Have you heard the one about Big Government and the Gold Standard?

(Proof that even dull 'blogs can inspire interesting questions:)

Ron Paul has popularized it of late, but it is an opinion long current among downmarket libertarians, that going off the gold standard enabled the Federal government to grow to its current size and that going back on the gold standard is a sensible route to decreasing the size and scope of government.

There may even be a kernel of truth to it: going off the gold standard meant that the US as a nation could run up a current account defecit without provoking an attack on the dollar, doing away with Triffin's Dilemma, carrying with it two side effects, the first being that private business was free to import according to market prices, without a need for quotas in order to prevent a major depression, and that the government, too, was free to spend more on foreign aid and defense. The balance of payments was no longer a make-or-break issue; the dollar's peg to gold, which to a modern eye looks artificial and superstitious, no longer unnecessarily complicated everyday economic activity.

That isn't what vulgar libertarians have in mind, though, when they denounce the Federal Reserve and call for a return to a gold standard. Triffin's Dilemma is also resolved when the US Dollar is no longer the base currency for the rest of the world, but massive government interference in the marketplace, in the form of export subsidies, high tariffs, and import quotas, would nonetheless be necessary to prevent an attack on the dollar, deflationary spiral, and depression. I doubt that even Ron Paul would give up free trade to get gold.

The argument instead is that the "government can and does Just Print Money to finance Wars, Welfare, and All That." Translating crass ignorance of the money creation process out of that statement, the libertarian gold bugs' allegation is that the Federal Reserve is a major enabler of defecit spending.

Is that so? The numbers don't bear the story out. As of the seventh of January, 2008, according to the Treasury Dept's Bureau of Public Debt, the total US public debt was $9,199,557,987,743.58, of which $4,083,366,539,555.28 is intragovernmental (owed by the government to itself: think "Social Security Trust Fund") and $5,116,191,448,188.30 is held by the public, including by the Federal Reserve. The Federal Reserve, as of October 2007 held $775,000,000,000 of the public debt. That amounts to roughly 8% of the total, or 15% of the portion held by the public.

The Federal Reserve thus enables about eight percent of Federal defecit spending. Is taking a purchaser of eight percent of the debt out of the picture really worth going back to the days when imports and exports were a political issue, or worse still, to the era of Great Depressions and even greater Panics of 1873, of cyclical depressions and deflationary spirals?

Thursday, January 3, 2008

My America, Yours, and John Edwards's

John Edwards, the far-left candidate for the Democrats' presidential nomination, once said there are "Two Americas", one for the powerful and the other for everyone else. Tonight, in his speech delivered after Obama won the Iowa caucus, it became clear that there are two: one in his head and the other in which the rest of us live.

In Edwards' America, the 47 million people without health insurance "beg" for treatment at the emergency room. The emergency room in Edwards' America is also apparently where people go to get anti-cancer chemotherapy, which sounds like much speedier treatment than we must deal with in real life. Apparently there's something called "health care coverage" one must buy to get such a speedy course of treatment. I don't have it, thus if I was diagnosed with cancer tomorrow I'd have to see a few specialists, including an oncologist, and suffer through several weeks of chemotherapy, none in the emergency room.

And in Edwards' America, wealthy personal injury lawyers with twenty-six million dollar homes can't open their wallets to pay for cleft palate surgery for downtrodden coal miners. The rest of us must be soaked.

Edwards has taken to being the sob-sister and poverty prostitute of the '08 campaign. (He's also possibly the cocktail-party socialist Lew Rockwell is looking for...) The matters he brings up: poverty, the flawed health-care system, relocation of manufacturers, could all be helped by careful examination of extant public policy. Health care, especially, has been broken by a flawed tax code coupled with government mandates that constitute for many people an effective ban on cheap insurance. Otherwise they're social issues, suited more for the church pulpit or the civic fraternity fundraiser than the campaign stump. That such matters get brought up in the context of a political campaign should have us afraid, and Edwards's manner of doing so should have us shaking in our boots. Edwards is such a simpleton he makes Tom Tancredo look nuanced and such a formulaic ideologue that Ron Paul is a casuist by comparison. He seems to believe that real life is described by same sort of victim/villain narratives he told in the courtroom. Who's a villain? Anyone who's not a victim. Work, save, be entrepreneurial, be responsible, take care of yourself and your own, and you become the target of Edwards's class warfare.

Under an Edwards presidency, if he had his way--and the bad ones always do, separation of powers be damned!--we can look forward to any of the following three scenaria:

  1. Companies like Maytag are forced to keep US plants open until bankruptcy, so as not to "send jobs overseas",
  2. A privileged class is created, of Maytag shareholders, who are paid a subsidy by the rest of us so as not to go bankrupt when forced to keep US plants open by the Federal government,
  3. A tariff, or even an embargo on imported washing machines, is put into place to wipe out other countries' comparative advantage, driving up the price and making something our grandmothers considered a luxury once again less affordable at the margin.

It's not just washing machines that are at stake. Automobiles, microwaves, food, clothing, and health care will all become luxury goods that many of us wouldn't be able to afford without government transfer payments were Edwards to become president. The pool of successful people to be shook-down, soaked, mugged, or otherwise robbed, will also diminish. Fighting poverty the Edwards way will only make us poor and increasingly dependent on men like himself for our basic necessities. Iowans ought be ashamed such a man even received thirty percent in their caucuses!

Is Rockwell a "creative anachronist"?

It must be a slow week, as Lew Rockwell, the Dean of Downmarket Libertarianism, had time to put together fifteen hundred words of trite bombast about "socialism", particularly the increasingly rare and comical cocktail-party socialist.

I wasn't able to spot any new insight, nor was the exposition particularly fresh, but I did learn a couple of things about Lew Rockwell: he doesn't get away from his fellow ideologues enough, and he hasn't taken Tyler Cowen's advice to heart.

Rockwell tells us neither who these cocktail-party socialists are nor why he concludes socialism is still "fashionable". Contra Cowen, we're told none of the author's personal anthropological experience with the people in question. I spend most of my time around academics and generally progressive-minded folk, I've dated quite a few left-leaning women and am marrying an ex-leftist, and for a few years until recently was rather highly involved with the ACLU at the local and state levels. I have found (and it would surprise the teenaged me) that social-democracy, let alone real socialism, is on the wane on the American left. Most leftists one encounters, at cocktail parties and elsewhere, believe that markets, in general, are desirable, and get hung up on specific instances, having never developed the intellectual capacity to devise a solution to either a market failure or a social problem that doesn't involve permanent government intervention. Lack of imagination, lack of exposure to the alternatives, and a certain lack of confidence, not a secretly believed far-left ideology, is what tends to make the leftist a leftist. If one wants concrete evidence of the shift, witness the support of many left-leading folk for carbon trading!

One could say that socialism is about as fashionable as Ben-Gay and Geritol: the major group exception to the above observation is the soixante-huitard academics and associated movement New Leftists over 60 years old. The others are trivial: maladjusted European ex-pats and angry, pathological youngsters of the sort who like to wear black, chant slogans, and pretend they're going to "drive out the Bush Regime".

Holed up with like-minded ideologues at Auburn, isolated by choice and personality even from mainstream libertarians, let alone the current political discussion, Rockwell has no way of knowing that, in the USA, parlor socialism has gone the way of Freudianism: a one-time intellectual fad now reserved to fools and the deranged.

Unlike the modern left: economic interventionists, "capabilities" theorists like Martha Nussbaum, and utilitarian soft or single-issue social-democrats, socialism is an easy target for the Austrian ideologue. Just as he fancies himself an "economist", he deludes himself into thinking that one of his own predicted--"precisely", in Rockwell's words--the mechanism of socialism's downfall. But the astute observer of Austrianism will note that, since Austrians reject quantitative work, they could not possibly have predicted such a thing, as they have no way of saying whether difficulty of economic calculation, as opposed to the socialist system's numerous other problems, would be its downfall. Moreover, historians will note that calculation was not the downfall of any of the 20th Century's socialist regimes, nor even the driver of reform in the social-democracies. Austrians may have predicted that socialism would fail, but their guess is akin to that of a kook who predicts anthropogenic global warming to be primarily caused by the cattle industry, if not to a stopped clock's twice-daily accurate time.

Easy target, indeed. Haven't we heard this same line before from the Austrians? "Socialism is stupid. It failed in Russia and the Warsaw Pact. It failed in India. Von Mises wrote a book called Socialism. He said it would fail. We like Von Mises." Does Rockwell have a program on his computer that automatically denounces either of socialism or Keynesianism? Does his target audience read these essays or merely scan them for key-words and conclude that Rockwell is still one of theirs?

I'm not a member of the Society for Creative Anachronism, but if I were, I'd nominate Lew Rockwell to be its president. He's fighting yesteryear's battle, with gusto, even accurately preserving the errors of his chosen side!