No Treason

I saw this on the Mises forum.

If it is true that higher government taxation depresses job creation and that the government can’t create wealth (only the free market can), …

I’m talking about John E. Schwartz, Page A15 Guest State Economist at the Washington Post.

If you’re a Professor Emeritus, and a public policy economics wonk, shouldn’t you know whether or not the government can create wealth?

What follows is a blue vs. red diatribe about how Democrats are better than Republicans. The view is so simplistic, so asinine…

With no regard to the cycles of credit expansion, with no regard to the amount of regulation apparently the stock market likes a Demonrat more than a Republicon, according to Schwartz. Not to mention, he neglects to give any credit to the legislators and bureaucrats, who surely have a greater effect on budget and policy than the President.

This is stereotypical state worship, where all things flow from Caesar, rather than acknowledging all wealth flowing from the citizens to the Senate. How people who write, preach and (I assume) teach these things find a venue and profession for such ignorance will always bother me.

Professor Schwartz seems to he believe that the government can multiply wealth in a managerial/capital finance role, and yet overlooks the consequences of nearly a century of fiscal and monetary mismanagement, such as enormous public debt, a persistent poverty rate, and a negative savings rate.

Using inflation to shape behavior, the American state has made it unattractive and unprofitable for citizens to save, guaranteeing itself a monopoly as a nation’s capital financier. But we know that the state in a monopoly role always mismanages the wealth it confiscates due to an inability to perform economic calculation (pricing).

Cheering for Demonrats over Republicons as the better steward of stolen property and opportunity isn’t anything to be proud of. And for the reader, it’s not a lesson worth taking away from Professor Schwartz. The next generation and the one after it, doesn’t have a stake in the state or in the blue vs. red game. Their stake is exactly where it should be. In their own self-interest.

Charity (and prosperity) after all, begin at home.

FSK writes,

According to phony (Keynesian) economics, low unemployment means that workers can demand higher salaries, causing inflation. This is false.

Indeed it is false, and Keynes theories on employment and inflation were thoroughly refuted by the happenings of the 1970s in America. That period underwent stagflation, or rising prices and rising unemployment, two things that were not meant to happen simultaneously under the Keynesian theory, even though Keynes himself acknowledged that condition as a potential consequence of central banking and a domestic policy of price controls.

I find this is the most effective point to make when debating with a Keynesian, or anyone who has been indoctrinated in their public education to believe the numerous macro-economic fallacies promoted by the state. Unfortunately, due to the Religious Fervor of Socialism many people do not take to debates based on fact or proof, and thus caveat emptor if you wish to employ this approach.

Of course Neo-Keynesians will talk about cost push inflation, but as per Austrian theory, we know that inflation cannot occur in the absence of increases in the money supply. Cost Push and Demand Pull are used to obfuscate increases in pricing, to attribute them to any factor but changes in the supply of money. I don’t have the book in front of me, but Peter Schiff devotes a little space in “Crash Proof” to dismissing these terms.

If you’ve got any other quick and simple arguments for attacking Keynesian or Statist fallacies, leave them in the comments.

On the Mises forum, Majevska wrote,

The majority of people start to hate libertarians when they are humiliated by them. You may be 100% correct in your logic, and if so you will probably make the other person feel defeated and humiliated and all you accomplish is making yourself into an object of hatred and discomfort.

This reminded me of something I read in “Mises and Austrian Economics: A Personal View” by Ron Paul.

“No one should expect that any logical argument or any experience could shake the almost religious fervor of those who believe in salvation through spending and credit expansion”

That’s from Ludwig Von Mises, “Stones into Bread : The Keynesian Miracle” Planning for Freedom 1974 p. 63

I’d like to add, the humiliation is not always a result of the approach. I think many people feel shame when they realize they have never critically thought about what they believe, let alone that they may be totally wrong. They cannot defend their position, which makes it seem like more of a beating.

Someone also wrote in the discussion that no one likes finding out Santa doesn’t exist.

Worse than that, no one with any modesty likes finding out that they were believing a lie. It is very embarrassing.

Jim Cramer gets hysterical about corporate fascism.

Shame he didn’t have this level of outrage when he was flogging bad tech stocks before the dot com bust, or during the Housing Crisis.  Oh well, at least he treated Ron Paul with respect when he had him on his show.