Ron Paul "Debates" A Box Of Rocks (Moderated By Trish Regan)

Did you catch this one-on-one "Paul vs Paul" debate that aired on Bloomberg TV on April 30, 2012?

Popular wisdom has it that Ron Paul "owned" Paul Krugman in this "debate." To my mind neither "debater" did himself or the viewing public any favors.

Consider the following:

PAUL: ...Governments aren't supposed to run the economy. The people are supposed to run the economy.

Jesus, Ron, "run the economy?" Seriously. I thought you were familiar with the writings of Ludwig von Mises. In The Ultimate Foundation of Economic Science, Mises writes:

The worst enemy of clear thinking is the propensity to hypostatize, i.e., to ascribe substance or real existence to mental constructs or concepts.

The economy is not a thing. It is not some kind of machine, like an automobile, that requires an operator. The economy is a "mental construct." It's a euphemism for 300 million individuals in this country engaged in social cooperation, i.e., engaged in trade with one another. That kind of cooperation should kind of run itself, shouldn't it? Maybe that's what you meant, but you sure didn't articulate that meaning.

Here's how Mises articulates it in his most famous work, Human Action:

There are two different kinds of social cooperation: cooperation by virtue of contract and coordination, and cooperation by virtue of command and subordination or hegemony...Where and as far as cooperation is based on command and subordination, there is the man who commands and there are those who obey his orders...

...What differentiates the hegemonic bond from the contractual bond is the scope in which the choices of the individuals determine the course of events. As soon as a man has decided in favor of his subjection to a hegemonic system, he becomes, within the margin of this system's activities and for the time of his subjection, a pawn of the director's actions...

...In the frame of a contractual society the individual members exchange definite quantities of goods and services of a definite quality. In choosing subjection in a hegemonic body a man neither gives nor receives anything that is definite. He integrates himself into a system in which he has to render indefinite services and will receive what the director is willing to assign to him. He is at the mercy of the director. The director alone is free to choose. Whether the director is an individual or an organized group of individuals, a directorate, and whether the director is a selfish maniacal tyrant or a benevolent paternal despot is of no relevance for the structure of the whole system.

Ron, I know you can't say all that in a 20 minute TV "debate." The box of rocks you're debating wouldn't understand it anyway. But you could get the point across that individuals acting in an economy should rightfully be FREE TO CHOOSE, free to trade as they wish, on their own terms, not on terms set by a central authority, most especially not on terms set by political parasites in Washington, DC.

Krugman can't imagine 300 million individuals trading amongst themselves on their own terms without adult supervision by parasitic politicians:

KRUGMAN: You can’t leave the government out of monetary policy. If you think we’re going to let it set itself, it doesn’t happen. If you think you can avoid the government from setting monetary policy, you’re living in the world that was 150 years ago. We have an economy in which money is not just green pieces of paper with faces of dead presidents on them. Money is a part of the financial system that includes a variety of assets – we’re not quite sure where the line between money and non-money is. It’s a continuum.

Isn't it obvious Krugman is functioning barely one notch outside the realm of gibberish? Because today individuals are not free to choose, free to cooperate by contract, due to the hegemony of political parasites the world over, Krugman can't imagine ever returning to a time 150 years ago when individuals were largely free to cooperate by contract, i.e., to manage their own affairs free from parasitic intervention.   

Krugman is such a moron he admits he doesn't know exactly what money is, but at the same time he wants the central, political parasite -- the government -- to set "monetary policy!" The box of rocks doesn't believe individual traders, cooperating by contract, could originate and create money without the intervention of a parasitic authority.

Here's what Mises has to say about that in Human Action:

If it is assumed that the conditions of the parties concerned are improved by every step that leads from direct exchange to indirect exchange and subsequently to giving preference for use as a medium of exchange to certain goods distinguished by their especially high marketability, it is difficult to conceive why one should, in dealing with the origin of indirect exchange, resort in addition to authoritarian decree or an explicit compact between citizens. A man who finds it hard to obtain in direct barter what he wants to acquire renders better his chances of acquiring it in later acts of exchange by the procurement of a more marketable good. Under these circumstances there was no need of government interference or of a compact between the citizens. The happy idea of proceeding in this way could strike the shrewdest individuals, and the less resourceful could imitate the former's method. It is certainly more plausible to take for granted that the immediate advantages conferred by indirect exchange were recognized by the acting parties than to assume that the whole image of a society trading by means of money was conceived by a genius and, if we adopt the covenant doctrine, made obvious to the rest of the people by persuasion.

Krugman, let me state this in simpler terms you might be able to understand: Even prisoners can figure out on their own that cigarettes are money behind bars! They don't need a "genius" tyrant like you to explain it to them and force it upon them!

You want more Krugman drivel? Consider this Krugman explanation of the Great Depression:

KRUGMAN: The reality is it was a market economy run amok, which happens, happens repeatedly over the past couple of centuries. You do need...I'm actually a believer in the market economy, I’m a believer in capitalism. I want the market economy to be left as free as it can be, but there are limits. You do need the government to step in to stabilize. Depressions are a bad thing for capitalism and it's the role of the government to make sure they don't happen, or if they do happen, they don't last too long.

Where to begin?!?!?! How about I allow Mises to explain to Krugman just what this "market economy" is that Krugman believes in:

The market economy is the social system of the division of labor under private ownership of the means of production. Everybody acts on his own behalf...There is in the operation of the market no compulsion and coercion. The state, the social apparatus of coercion and compulsion, does not interfere with the market and with the citizens' activities directed by the market...The market is not a place, a thing, or a collective entity. The market is a process, actuated by the interplay of the actions of the various individuals cooperating under the division of labor. The forces determining the --continually changing--state of the market are the [p. 258] value judgments of these individuals and their actions as directed by these value judgments. The state of the market at any instant is the price structure, i.e., the totality of the exchange ratios as established by the interaction of those eager to buy and those eager to sell. There is nothing inhuman or mystical with regard to the market. The market process is entirely a resultant of human actions. Every market phenomenon can be traced back to definite choices of the members of the market society.

Krugman, trust me. You DON'T believe in a "market economy!" You covet a market run by "geniuses" like yourself who know how to "stabilize" it, to keep it from running "amok" and to "make sure" depressions and recessions "don't last too long."

Good grief! Has this idiot been asleep the last six years, or, for that matter, the last hundred?!?!?

Lastly, consider this absurdity:

KRUGMAN: You really think that people – that’s not what I, that’s not my understanding of the law - but do you really think people use dollar bills only because the federal government isn't allowing them to use other stuff?

Well, yeah...! Duh!! Trying paying your federal income taxes with "other stuff" and see where it gets you. Why not empty your head and try paying your taxes with a box of rocks, you numbskull!

I can't go on!... Writing this post is too brutal, too painful. It's like...it's like talking to a box of rocks. And lest Krugman accuse me of favoritism, I will end with a quotation from Ludwig von Mises in Human Action that is absolutely naive, incorrect and absurd:

For two hundred years the governments have interfered with the market’s choice of the money medium. Even the most bigoted étatists do not venture to assert that this interference has proved beneficial.

Sorry, Ludwig. Even you could not foresee an idiot etatist as bigoted as Paul Krugman. I know...I know. They gave him your Nobel Prize! Well, they're idiots too.

Now for the best thing about the "Paul vs Paul" debate: Trish Regan!

Ludwig von Mises Tells Cher To Suck Wind

Yesterday, Cher wrote this:

If ROMNEY gets elected I don't know if i can breathe same air as Him & his Right Wing Racist Homophobic Women Hating Tea Bagger Masters

And this:

TOO HARSH ? Thats me Holding BACK! They care nothing about the POOR The OLD The SICK
The HUNGRY CHILDREN & People striving 4 a Better LIFE !—

Today, she wrote this:

Sorry 4 bringing Wrath of Kahn Lovelies!Feelings r 1 thing but no right 2 let mean spirit run free! Anger in heart made me turn back on Luv

And this:

Oh babe where ya been? Went Full Rush! Was on Cher Tear ! RT @DoctorSwill @cher Oh no...what has your mouth done now? :)~

Fifty-six years ago, Ludwig von Mises wrote this:

The many to whom capitalism gave a comfortable income and leisure are yearning for entertainment. Crowds throng to the theatres. There is money in show business. Popular actors and playwrights...live in palatial houses with butlers and swimming pools. ...Yet Hollywood and Broadway, the world-famous centers of the entertain­ment industry, are hotbeds of communism. Authors and performers are to be found among the most bigoted supporters of Sovietism...

...Under capitalism, material success depends on the apprecia­tion of a man’s achievements on the part of the sovereign con­sumers. In this regard there is no difference between the services rendered by a manufacturer and those rendered by a producer, an actor or a playwright. Yet the awareness of this dependence makes those in show business much more uneasy than those supplying the customers with tangible amenities...

...People long for amusement because they are bored. And nothing makes them so weary as amusements with which they are already familiar. The essence of the entertainment industry is variety. The patrons applaud most what is new and therefore unexpected and surpris­ing. They are capricious and unaccountable. They disdain what they cherished yesterday. A tycoon of the stage or the screen must always fear the waywardness of the public. He awakes rich and famous one morning and may be forgotten the next day. He knows very well that he depends entirely on the whims and fan­cies of a crowd hankering after merriment. He is always agitated by anxiety. Like the master-builder in Ibsen’s play, he fears the unknown newcomers, the vigorous youths who will supplant him in the favor of the public.

It is obvious that there is no relief from what makes these stage people uneasy...Communism, some of them think, will bring their deliverance. Is it not a sys­tem that makes all people happy?...

...It may be fairly assumed that none of the Hollywood and Broadway communists has ever studied the writings of any so­cialist author and still less any serious analysis of the market economy. But it is this very fact that, to these glamour girls, dancers and singers, to these authors and producers of comedies, moving pictures and songs, gives the strange illusion that their particular grievances will disappear as soon as the “expropriators” will be expropriated...

...But it is noteworthy to remember that no other American milieu was more enthusiastic in the endorsement of communism than that of people cooperat­ing in the production of these silly plays and films.

I appreciate Ludwig von Mises' cogent analysis of the "glamour girl" mindset. Yet, I tend to believe there is another, simpler explanation of why rich celebrities endorse socialism and yearn for the federal parasites in Washington to raise taxes on the wealthy and redistribute the seized spoils to the "Poor" and the "Old" and the "Sick" and to the "Hungry children." That explanation is GUILT and ENVY.

Many of these babied, wealthy, Hollywood "has beens" look back on their life and wonder "Why me?" Why am I so fortunate, so privileged, so rich? Yes, I've worked hard, but I truly enjoyed every second. I would do it again in a heartbeat. Wealth and celebrity came easy to me. Wealth and celebrity are a matter of luck.

Yes! That's it! I was simply lucky! Other poor slobs are not so lucky. Therefore, the lucky must contribute a portion of their wealth to the unlucky! It's just common sense!!

Of course, I could voluntarily contribute to the unlucky common people through private charities -- and I do. But that's just me! What about other lucky bastards like me who are even more rich than me but who are ignorant or selfish? These lucky, ignorant and selfish rich individuals must be forced by the central authorities in Washington to contribute a portion of their wealth to the unlucky too! It is only fair!

Besides, I'm not saying that we rich, lucky bastards have to give everything we have to the unlucky masses. If we all gave a little, we could still enjoy the lifestyle we've earned by all of our hard work and the unlucky ones would benefit.

The rich, lucky Republican bastards, like those selfish, evil Koch brothers are the worst. I hate them!! They are the richest of the rich, the luckiest of the lucky! Yet they show no compassion, no heart whatsoever! Anyway, why should the Koch brothers be allowed to be richer than me? Did they work harder than me for what they have? Are they better persons? Do they have a bigger heart? Are they more loving?

Not!!!

So make them pay!!!!

What this poor, pathetic, conflicted soul does not understand, and what Mises points out, is that the production of wealth is not independent of the means by which it is distributed. Her simple-minded advocacy of socialism may soothe her feelings of guilt and envy, but it inevitably makes us all poorer by destroying the very thing that allowed Cher to produce her wealth in the first place: private property and the freedom to pursue it and accumulate it for herself.

The "Free Market" R Us!

Yesterday Bird Dog over at Maggie's Farm posted a link to JR Nyquist's cogent article, "Saving the Free Market," which references Ludwig von Mises' book: "The Anti-Capitalistic Mentality." I've discussed this brilliant book here on several occasions.

Mises spent a lifetime studying, explaining, defending and advocating something called the "free market." I often wonder if the man on the street really understands the concept.

Bird Dog's post pulls the following quote out of Nyquist's article:

According to Mises, “The profit system [of the free market] makes those men prosper who have succeeded in filling the wants of the people in the best possible and cheapest way.” The free market is a daily plebiscite, he explained, in which “every penny gives a right to vote … who should own and run the plants, shops and farms.” Rather than giving everyone an equal share in running the economy, the free market places in charge those best able to provide for the many. In this arrangement, everyone must produce. Everyone buys and sells. “This is what the modern concept of freedom means,” noted Mises. “Every adult is free to fashion his life according to his own plans.

This quote, of course, accurately describes the workings of the free market, but it really doesn't say what the free market is. Some would read the paragraph above and be filled with cynicism and horror. They might argue:

"The profit system" is rigged in favor of the 1%, the big, wealthy corporations that create our consumer society. The rich and powerful corporations fill the airwaves with advertisements that make people want to buy stuff they don't need. Then they exploit our cheap labor to build the stuff. Then they sell it back to us in big, corporate, box stores at exorbitant prices we can't afford.

We might be able to vote with our "every penny" on who runs things, but the fat cats are voting with dollars not pennies. They always win. A rich man may be able to "fashion his life according to his own plans," but the poor man is trapped. Markets may be "free," but they are definitely unfair.

To understand what the free market really is we must cast aside the rhetoric and the economic jargon. Forget words like profit, loss, supply and demand. Forget the big concepts like the economy and the market place. Ask yourself some basic questions instead, like:

Is the money I earn mine?

Most Americans would answer, of course, it is mine. Whose else would it be? Well, it might be the landlord's. He takes a huge chunk of it every month. Or the grocer's. Or the shoe store owner's. Or Uncle Sam's. He takes his share before you ever see your paycheck.

Upon reflection, it should be easy to see that some of these individuals don't really take your money. You voluntarily give it to them in exchange for things you need and want. If you don't like the things they give you in exchange for your money, you can change trading partners, i.e., rent from a different landlord, buy from a different grocer or patronize another shoe store. However, your relationship with Uncle Sam is a bit different.

Uncle Sam confiscates his share of your paycheck without asking and gives you in return...well, what does Uncle Sam give you in return? Roads? Police services? Fire services? Schools? Not really. These things are given to you in return for your taxes by local cities and towns. What do you get in return for the tax money you send Uncle Sam in Washington, DC?

While you're thinking about that, ask yourself what your options are if you're dissatisfied with the things you're getting back from Uncle Sam. You can't buy military protection from another Uncle. You can't mail your first class letters from another Post Office. You can't patronize another Medicare store or Social Security office.

The truth is where Uncle Sam is concerned you have no choice in the matter. You're stuck with the stuff your parasitic Uncle wants to give you in return for money he takes without asking.

So I ask again: Is the money you earn really yours?

It should be obvious that the answer is no, at least not the part confiscated and used by Uncle Sam.

The next question to consider is: Which do you prefer? Owning and controlling your own money? Or having it confiscated by someone else who may or may not give you something you want or need in return?

Most people are most satisfied owning and controlling their own money. They are most comfortable making their own decisions about what to buy and from whom to buy it.

Of course it's not an either-or proposition. Obviously, the United States swings both ways. On the one hand, you send a big chunk of money to anonymous bureaucrats in Washington DC who do with it as they please. On the other hand, you get to own and control what's left.

But, then again, it's not really that simple. Because the more powerful these anonymous bureaucrats become the more rules and regulations they pass, rules and regulations that tell you under penalty of the law how you can or cannot spend the portion of your money you got to keep for yourself.

If the portion of your money you own and control is actually controlled by Washington rules and regulations, who really owns your money? The answer should be obvious. You don't. Uncle Sam does.

So what is a free market? It's not Uncle Sam and his faceless minions doing what they want with money they've confiscated from you. It's YOU, doing what YOU want with money YOU earned -- with absolutely no interference from Uncle Sam. 

Now I've got another question for you: How large is the free market in the United States? That is, how large (or small) is that portion of the money you earned that Uncle Sam let's you keep and that you get to spend exactly as you want to spend it without interference from Uncle Sam?

50%? 40%? 20%? I can't tell you. You have to tell me. Maybe a quick check of your federal, state and local income and property tax returns will help you decide. If you're a numbers person, maybe the graph below will help. Of course the graph only shows the growth in the portion of your money Uncle Sam controls. It doesn't show the portion of your money your state, county, and local politicians control. But you get the point.

As the graph shows, the size of the free market in the United States has been dwindling drastically over the years. At the turn of the century individuals in America got to own and control over 90% of the wealth they produced. They got to spend that wealth on themselves and their families exactly how they wanted and with whom they wanted. Uncle Sam owned and controlled less than 10% of the wealth they produced.

Today Uncle Sam owns 40% of the wealth individual Americans produce, and he controls considerably more. After the new Affordable Health Care for America Act (ObamaCare) fully kicks in, and local, county and state controlled wealth is added, Uncle Sam and company will control well over half of all the wealth produced by individuals in these United States. The free market -- in other words, YOU -- will own and control what's left, maybe 40%! The trend is clear. The free market in this country is going, going, gone.

The very saddest part of this story is the ending. Many, many individuals in this country are pleased to see the free market disappear. They do not want to be part of a free market. They want Uncle Sam in all his reincarnations to spend their hard-earned money for them. These naive and trusting souls apparently believe that politicians are more responsible, more honest, more hard working, more productive and more caring than they themselves are providing for themselves in a free market.
  
I don't believe it for an instant. Do you?

Help Me Change The Lexicon: Government = Parasite

As of this moment I will no longer use the word "government" in this blog. In all future posts I will substitute the word "parasite" instead. I invite all bloggers who value individual liberty to follow suit.

Why? 

The answer is obvious. The relationship between individual citizens and the elitists who rule us from Washington, D.C., our respective state capitols, county seats and city halls is identical to the relationship between host and parasite.

Imagine a group of like-minded individuals who want to live peacefully and cooperatively on their own in some far off corner of, say for example, the Alaskan wilderness. Imagine these individuals purchased the property on which they intend to settle. Imagine further that they wish to secede in every sense from the nation-state known as the United States of America. By "secede" I mean sever all ties: renounce their citizenship; refuse all local, state and federal "services;" and disavow all local, state and federal law enforcement and legal jurisdictional ties. In short, imagine this group of individuals wants to cooperate without parasitic interference by anyone.

Would such a thing be possible?

I think the obvious answer is no.

Parasites at all political levels would probably claim jurisdiction over this group of settlers and refuse to allow them to live freely without intervention. But why?

"Because you're skipping out on your obligations," the elitists might accuse the settlers, "obligations to your fellow citizens like pending tax liabilities, pending legal actions, lawsuits, etc. etc. etc.

So let's imagine our intrepid group of individual cooperators pay off all imaginable and legitimate outstanding debts to their former American countrymen.

It's a sure bet that the elitists in Washington would still intervene, i.e., they would predictably use force to prevent this group of individual cooperators from severing, existing political ties.

But why? A group of individual cooperators living free in the Alaskan wilderness presents no danger to any other American, no burden to anyone. So why would Washington interfere?

Because the parasites in power do not want to lose that power. They must hold sway over their individual hosts in order to feed off them. Without this parasitic sustenance they will suffer or perish.

Individuals cooperate in society to attain ends they share in common. Cooperative action is mutuality of purpose. How does a society of cooperative individuals morph over time into a colony of parasites and hosts?

The short answer is by means of lies and coercion. Cooperative action in society is a long and complicated process which is dependent upon mutual trust, i.e., a mutual agreement among all cooperating individuals to avoid certain anti-cooperative actions in order to attain ends shared in common. This mutual agreement to avoid proscribed anti-cooperative actions like murder and theft implies that cooperative action is voluntary.

For example, trade is a rudimentary form of cooperative action. Two traders agree to voluntarily exchange goods or services they each value differently. Peaceable, voluntary exchange is the means; mutual satisfaction is the common end sought. However, mutual satisfaction is impossible if, once the goods or services are exchanged, the traders may murder each other or employ force or coercion in order to steal back what has been traded.

It follows, then, that cooperation and coercion are incompatible and contradictory actions. Yet, in American society cooperation and coercion exist side by side. How can this be?

Successful cooperative action in society, i.e., institutionalized cooperation, requires some means of institutionalized justice. Men are not angels. Murderers and thieves exist and some may masquerade as cooperators. If these murderous and thieving masqueraders go unchecked, the institutionalized cooperative society will quickly crack up. Why? Because cooperative action in society rests upon a foundation of trust. Once that foundation is broken, cooperative action cracks and crumbles.

The advantage of institutionalizing cooperative action in society is that members of that society do not have to vet their trading partners prior to each exchange. Therefore, exchange is vastly expanded and facilitated because all members of the institutionalized, cooperative society are assumed to be trustworthy. This is accomplished by establishing, by mutual agreement, an institutional means of enforcing the societal prohibition against murder and theft. That is, cooperative partners empower certain, trustworthy members of their society to act as an authority that will enforce prohibitions against murder and theft, and that will penalize and punish murderers and thieves.

A society ceases to be a cooperative society when the individuals empowered to enforce prohibitions against murder and theft use their power illegitimately to enforce and coerce other proscriptive and prescriptive individual actions which have not been mutually agreed upon. The empowered individuals and their sycophants become parasites who attain their sustenance by preying on other cooperators -- their "hosts" -- by means of lies and coercion. These parasites lie that their unauthorized, coercive actions are in the best interests of all cooperators. They coerce those cooperators who object to their parasitic actions. This coercion assumes the veil of legitimized murder and theft ostensibly committed in and for the "common good."

As a consequence of parasitic lies and coercion, a society gradually develops wherein a large segment of formerly cooperative individuals sanction the anti-cooperative actions of the parasites. As a consequence of this sanction, the segment of true and legitimate cooperators are coerced into accepting their role as hosts. So long as the parasites do not make the attainment of mutual ends totally impossible, these legitimate cooperators tolerate the parasites. They consider the parasite's feeding on them as the price they pay to attain the cooperative ends they seek.

However, since it is an undeniable truth that cooperative action is and must be voluntary, and since it is also true that cooperation and coercion are incompatible and contradictory actions, the cooperative society which has been infected by parasitic action cannot survive for long. It must and will crack up as soon as the true and legitimate cooperators turned hosts have had enough.

This is the tipping point at which we find ourselves in American society today. The mutually agreed upon, cooperative pact of hundreds of years ago, which sanctified private property and which outlawed murder and theft, has been broken. Our once vast, cooperative society has been divided by sanctimonious, deceitful and increasingly brutal parasites who will stop at nothing to ensure that their supply of hosts is plentiful and uninterrupted.

The black truth is, however, that it is this very parasitic feeding frenzy, accompanied by patriotic music and tints of red, white and blue that will, in the end, inexorably lead not only to the destruction of the parasites but also, at the same time, to the destruction of our once cooperative society.

It is for this reason that I implore all honest men of good will to help save our cooperative society by calling a spade a spade. The elitists in power in Washington are not our guardian angels protecting us from all manner of enemies foreign, domestic and environmental.

These elitist and all-powerful politicians are simply and purely parasites who are slowly but surely eating away our substance. Perhaps labeling them as what they are will somehow allow us to collectively shake them loose from us once and for all.       

"Economic Democracy" = Economic Despotism

From "Planned Chaos," by Ludwig von Mises:

The market is a democracy in which every penny gives a right to vote. It is true that the various individuals have not the same power to vote. The richer man casts more ballots than the poorer fellow. But to be rich and to earn a higher income is, in the market economy, already the outcome of a previous election. The only means to acquire wealth and to preserve it, in a market economy not adulterated by government-made privileges and restrictions, is to serve the consumers in the best and cheapest way. Capitalists and landowners who fail in this regard suffer losses. If they do not change their procedure, they lose their wealth and become poor. It is consumers who make poor people rich and rich people poor. It is the consumers who fix the wages of a movie star and an opera singer at a higher level than those of a welder or an accountant.

Democracy is the God of Progressives and socialists. "Majority rule" is their mantra. This belief implies that the wisdom of the masses is contained in the mind of each voter. Yet, when considering the free market, progressives and socialists deny the wisdom of the masses who cast their votes freely for the producer they favor by purchasing his products or services. Instead of the uncoerced vote of consumers in the marketplace, progressives and socialists trust the judgement of unelected government bureaucrats and elected government regulators to pick economic winners and losers.

By taking money out of the pockets of the masses via taxation, progressives and socialists are in effect taking the right to vote away from individual citizens and giving that right to bureaucrats. The larger the size of government as compared to the size of the free market, the more the democracy of the free market is undermined and replaced by the economic edicts of bureaucratic tyrants.

Ask a progressive or a socialist whether they believe in "economic democracy." They will gush about that idea as a man of religion gushes about his God. They, of course, understand "economic democracy" to mean a political system wherein bureaucratic tyrants decide who produces what and how. That "what" is then equally divided amongst all the individual citizens.

These fools do not understand that their "economic democracy" is, in fact, economic despotism. A true "economic democracy" would be a system wherein each individual citizen freely votes to elect economic winners and losers -- the exact system Mises describes.

The Fallacy Of Progressive Interventionism

As Ludwig von Mises reasons, in a capitalistic, free market economic system the consumer is sovereign, i.e., consumers decide which particular goods and services satisfy their most urgent demands. The dollars consumers spend on these goods and services find their way into the hands of entrepreneurs who produce them most efficiently. Those dollars determine whether a particular entrepreneur will succeed or fail, whether he will earn a profit or suffer a loss, whether he will remain a small business in a tiny niche of the market or grow into a big business with a huge market share.

Mises points out that this process is continuous. Past success is no guarantee against future failure. The big successful business of years past often becomes today's bankruptcy because of its inability to keep up with the changing tastes and demands of the consumers.

Progressives intervene in the marketplace for a single reason: they disdain the choices made by the sovereign consumers. They use the coercive power of government to limit or change consumer choices. They pass laws which impose regulations and restrictions on consumers and producers alike. As a result, some goods and services which the consumers wish to buy are forced out of production while others, which the consumers do not want, are forced upon them.

When asked why they intervene into the free marketplace, Progressives offer a host of reasons: to guarantee public safety, to protect human health, to ensure public morality, to save the environment, to lower the price of politically sensitive goods and services, etc., etc. Progressives justify all of these interventions by arguing they are in the "public interest" or that they are for the "common good."

However, such justifications are absurd in light of how the capitalistic system of private property and free markets operates. In the system of private ownership of the means of production and consumer sovereignty, traders are absolutely free to exchange goods and services with whomever they wish on their own mutually agreeable terms. This freedom to trade or not to trade with any particular individual implies that when a trade is made both parties to the trade expect to benefit from the trade. If both parties do not expect to benefit, then the trade would not take place. This is obvious, common sense.

Consider an enormous free market with trillions of trades taking place every day between billions of buyers and sellers. The lack of government coercion in such a market ensures that all traders expect to benefit, i.e., each trader expects to be personally and subjectively better off and more satisfied after his particular trade than before. Does intervening in such a market in order to preserve the "common good" or protect the "public interest" make any sense at all? How can the "common good" or the "public interest" be interpreted as anything superior to the expected satisfaction of all?

The Coming, Great Progressive Depression

The Great Depression of the 1920's, 30's and 40's was one of the most traumatic economic downturns in the history of the world. The mere mention of the Great Depression conjures up images of insufferable poverty and a complete breakdown of society and the division of labor: soup kitchens, unemployment lines, agricultural dust bowls, hobos eating mulligan stew, stock market suicides and Hooverville shanty towns for the homeless.

Various schools of economics continue to argue about what caused the Great Depression. Whether Monetarist, Keynesian, Austrian or Marxian, all schools agree that the Great Depression was caused by interventionism -- either too much or too little. In his book, A Critique of Interventionism, Ludwig von Mises defines interventionism as "a limited order by a social authority forcing the owners of the means of production and entrepreneurs to employ their means in a different manner than they otherwise would."

The idea that interventionism caused the Great Depression is reasonable. No one -- not even the staunchest Marxist -- has ever argued that the economic structure of the United States during the time of the Great Depression was unfettered, free market capitalism. Therefore, it follows that whatever went wrong during the Great Depression was due not to unfettered capitalism properly understood, but to the vain attempts by the "social authority" at the time (the federal government and the Federal Reserve) to force capitalists to act "in a different manner than they otherwise would."

Economic reasoning inexorably demonstrates that each trading partner in a voluntary exchange must always benefit. Voluntary and unfettered exchange of private property is capitalism properly understood. Is it therefore reasonable for interventionist critics to argue that unfettered capitalism contains within itself the seeds of its own destruction, or some fatal flaw that leads men to voluntarily create the economic hell known as the Great Depression? This is, after all, why interventionists intervene. If capitalism did not contain some fatal flaw that must be remedied by forcing individuals to act in ways other than they would voluntarily act, what reason would interventionists have to intervene?

The notion that capitalism, properly understood, is fatally flawed is obviously preposterous. In order for this notion to be otherwise, interventionists justifying their own interventions would have to prove that individual capitalists engaged in voluntary exchange either do not always benefit mutually, or that these capitalists perversely define "benefit" as hunger, poverty and homelessness. One would think that the interventionists, unable to prove either, would quietly fade into history, but such is not the case. Indeed, interventionism today is far more prevalent than it was in the time of the Great Depression. This leads me to conclude that there is coming another Great Depression, this one far worse than the one experienced almost a century ago. In fact, we may be experiencing the beginning of this coming, Great Progressive Depression.


Why do I reach this conclusion? Because the modus operandi of modern Progressivism is interventionism, interventionism and more interventionism. The Progressive argument for interventionism today is no different than the argument of the interventionists of yesteryear. Unfettered capitalism, the Progressives say, is fatally flawed. However, like their predecessors, these modern day Progressive interventionists cannot coherently define, find or even describe this flaw.

So they point to empirical American economic reality. They observe that in America some people are more prosperous than others. They observe that the disparity between the incomes of the very wealthy and the very poor is wide. They blame capitalism for this disparity, never conceding that capitalism, properly understood, still does not exist in the United States, and never acknowledging that interventionism is far more prevalent than it has ever been. Foolishly, they set out to correct the flaw they perceive in capitalism by prescribing and installing more and more interventionism on an unprecedented scale.

Another flaw Progressives perceive in capitalism, which calls for the correction of interventionism, is corruption. No matter how productive and beneficial voluntary exchange may be, traders are wont to cheat their peers, exploit the economically weak, collude with each other and corrupt authority. To back up their assertions, the Progressives again point to the reality of the American economy. Everyday it seems government prosecutors indict liars, con men and thieves in big business and big government. But is it reasonable to ascribe the existence of these nefarious individuals to unfettered capitalism? Especially since the economic structure in which these characters thrive is not unfettered capitalism, properly understood, but omnipresent interventionism?

Ludwig von Mises had the answer:

To be sure, public opinion is not mistaken if it scents cor­ruption everywhere in the interventionist state. The corrup­tibility of the politicians, representatives, and officials is the very foundation that carries the system. Without it the sys­tem would disintegrate or be replaced with socialism or cap­italism. Classical liberalism regarded those laws best that afforded least discretionary power to executive authorities, thus avoiding arbitrariness and abuse. The modern state seeks to expand its discretionary power—everything is to be left to the discretion of officials. 

Since massive interventions caused the last Great Depression, it seems reasonable to believe that even more massive interventions today are bound to cause another: the coming, Great Progressive Depression. 

In view of the inability of Progressives to find a fatal flaw in the logic of unfettered capitalistic theory and in view of the fact that interventionism has time and again proved a practical disaster, why do Progressives continue to advocate interventionism?

Moreover, why do populist "economists" like Paul Krugman and Alan B. Krueger advocate Progressive interventionism on a massive scale as smart public policy? Krugman is a Nobel-prize winner and op-ed columnist at the New York Times. Krueger is President Obama's Chairman of the Council of Economic Advisors.

Is it any wonder popular entertainers and celebrities, like Bruce Springsteen, publicly advocate that America become a social welfare, interventionist state "like Sweden?" Springsteen can be excused for his woeful ignorance of economics. Like most celebrities and politicians -- indeed, most Americans -- Springsteen is uneducated in economics. His statements advocating interventionism do not originate from a reasoned understanding of interventionism. They are the regurgitated nonsense of quacks like Krugman and Krueger.

Anyone interested in a reasoned explanation of the futility of interventionism will find it available online free of charge from the Ludwig von Mises Institute. Mises' argument is clear, concise and impeccably logical. No economist -- not Krugman, not Krueger or any of their Progressivist peers -- have ever attempted to refute Mises' logic. Interventionist policies, says Mises, inevitably result in a lower standard of living for the very individuals the policies were designed to benefit.

Still, despite this certain knowledge and a wealth of empirical failures of interventionist measures, Krugman and Krueger, not to mention Springsteen, continue to blithely recommend them. Why?

Krugman and Krueger should know what Springsteen does not. As Mises puts it:

By its very nature, a government decree that “it be” cannot create anything that has not been created before. Only the naive inflationists could believe that govern­ment could enrich mankind through fiat money. Govern­ment cannot create anything; its orders cannot even evict anything from the world of reality, but they can evict from the world of the permissible. Government cannot make man richer, but it can make him poorer.  

Progressive critics will be quick to shout that this is pure hogwash, merely the racist and bourgeois opinions of an economic quack whose real goal is to keep the masses downtrodden. I suppose fair is fair. If I can call Krugman and Krueger quacks with impunity, progressives should be able to label Mises a quack as well. However, this privilege is not independent of argument or the truth. There is a difference between science and quackery, just as there is a difference between truth and untruth. One must read and critique the argument in the light of logic in order to judge between quackery and science. This neither Krugman or Krueger are wont to do. They prefer to shill for the interventionist status quo which greatly benefits them, both financially and psychologically, at the cost of the prosperity of the rest of us.

When the vacuous Nancy Pelosi stands before the nation and proclaims that extending unemployment benefits will create 600,000 jobs or that giving federal food stamps to the needy benefits the rest of us, she knows that her blatant economic stupidity will not be challenged either by the illiterate press or by Krugman, Krueger and company. Why would Krueger challenge Pelosi? His economic understanding is virtually the same as hers:

In his prepared remarks, Chairman Krueger said: "The rise in inequality in the United States over the last three decades has reached the point that inequality in incomes is causing an unhealthy division in opportunities, and is a threat to our economic growth. Restoring a greater degree of fairness to the U.S. job market would be good for businesses, good for the economy, and good for the country."

With only weak challenges presented by "far right" newscasts and knowledgeable economists on the internet, Pelosi's words -- and Krueger's -- gain the ring of truth among the rabble, like Springsteen, who know no better.

The unvarnished truth is that governmental intervention in the free market produces effects in the real world that are contrary to the stated intentions of the interventionists themselves. Government unemployment compensation and unionism results in less efficient production, capital consumption, lower wages and permanent and significant unemployment among American workers.

I am not going to flesh out the irrefutable logic which leads immutably to these conclusions. Mises has already done so. Unbiased individuals interested in economic truth will study and critique Mises' words. But be warned! Economic reasoning is not easy. Conclusions are not as conveniently supplied after thirty minutes as the finale of a television sitcom. However, the truth is there for all who want to fathom it.

For the last time, then, why do knowledgeable Progressives continue to advocate Progressivism? The simple answer is self interest. Mises puts his finger on it:

Surely, no one can doubt that the freedom achieved by classical liberalism paved the way for the incredible development of productive forces during the last century. But it is a sad mistake to believe that by oppos­ing intervention classical liberalism gained acceptance more easily. It faced the opposition of all those whom the feverish activity of government granted protection, favors, and privi­leges.

So, after all is said and done, the motive for this sad history of destructive interventionism that has plagued the world for the last 100 years, that has caused one Great Depression and is about to cause another Great Progressive Depression, turns out to be simple greed, avarice and selfishness -- the selfsame vices ascribed to the hated capitalist traders. The circle of hypocrisy and arrogant self-righteousness is thus closed on the interventionists themselves. 

Lastly, do not underestimate the damage to all of us that a hundred years of wrongheaded interventionism has wrought. As Mises observes:

Anyone defending interventionism with such arguments is undoubtedly seriously deluded regarding the extent of the productivity loss caused by government interventions. Surely, the adaptability of the capitalist economy has ne­gated many obstacles placed in the way of entrepreneurial activity. We constantly observe that entrepreneurs are suc­ceeding in supplying the markets with more and better prod­ucts and services despite all difficu1ties put in their way by law and administration. But we cannot calculate how much better those products and services would be today, without expenditure of additional labor, if the hustle and bustle of government were not aiming (inadvertently, to be sure) at making things worse. We are thinking of the consequences of all trade restrictions on which there can be no differences of opinion. We are thinking of the obstructions to produc­tion improvements through the fight against cartels and trusts. We are thinking of the consequences of price con­trols. We are thinking of the artificial raising of wage rates through collective coercion, the denial of protection to all those willing to work, unemployment compensation, and, finally, the denial of the freedom to move from country to country, all of which have made the unemployment of mil­lions of workers a permanent phenomenon.

Deluded and economically illiterate interventionists like to think their ideology means constant, step-by-step progress toward prosperity for all. Hence, they label themselves "Progressives." In fact, the abhorrent practice of "Progressivism" means constant, step-by-step progress toward certain impoverishment and the coming, Great Progressive Depression.

But there is another meaning that can be ascribed to the label: the Great Progressive Depression. I'm talking about the mental depression suffered by knowledgeable economists who realize that the vast damage wrought by interventionists over the last 100 years or so cannot be easily reversed and mitigated.

The following Mises quotation from "A Critique of Interventionism" is lengthy, but well worth anyone's contemplation. It should be of special interest not only to self-assured "Progressives" themselves, but also to political conservatives and libertarians who naively think prosperity will return to America immediately upon the election of a new, non-Progressive President:

Etatists and socialists are calling the great crisis from which the world economy has been suffering since the end of the World War the crisis of capitalism. In reality, it is the crisis of interventionism.

In a static economy there may be idle land, but no unem­ployed capital or labor. At the unhampered, market, rate of wages all workers find employment. If, other conditions be­ing equal, somewhere workers are released, for instance, on account of an introduction of new labor-saving processes, wage rates must fall. At the new, lower rates then all work­ers find employment again. In the capitalist social order un­employment is merely a transition and friction phenomenon. Various conditions that impede the free flow of labor from place to place, from country to country, may render the equalization of wage rates more difficult. They may also lead to differences in compensation of the various types of labor. But with freedom for entrepreneurs and capitalists they could never lead to large-scale and permanent unem­ployment. Workers seeking employment could always find work by adjusting their wage demands to market condi­tions.

If the market determination of wage rates had not been disrupted, the effects of the World War and the destructive economic policies of the last decades would have led to a de­cline in wage rates, but not to unemployment. The scope and duration of unemployment, interpreted today as proof of the failure of capitalism, results from the fact that labor unions and unemployment compensation are keeping wage rates higher than the unhampered market would set them. Without unemployment compensation and the power of la­bor unions to prevent the competition of nonmembers will­ing to work, the pressure of supply would soon bring about a wage adjustment that would assure employment to all hands. We may regret the consequences of the anti-market and anti-capitalistic policy in recent decades, but we cannot change them. Only reduction in consumption and hard la­bor can replace the capital that was lost, and only the forma­tion of new capital can raise the marginal productivity of la­bor and thus wage rates.

Unemployment compensation cannot eradicate the evil. It merely delays the ultimately unavoidable adjustment of wages to the fallen marginal productivity. And since the compensation is usually not paid from income, but out of capital, ever more capital is consumed and future marginal productivity of labor further reduced.

However, we must not assume that an immediate aboli­tion of all the obstacles to the smooth functioning of the cap­italist economic order would instantly eradicate the conse­quences of many decades of intervention. Vast amounts of producers’ goods have been destroyed. Trade restrictions and other mercantilistic measures have caused malinvest­ments of even greater amounts that yield little or nothing. The withdrawal of large fertile areas of the world (e.g., Russia and Siberia) from the international exchange system has led to unproductive readjustments in primary production and processing. Even under the most favorable conditions, many years will pass before the traces of the fallacious poli­cies of the last decades can be erased. But there is no other way to the greater well-being for all.

Inflation = Capital Consumption = Falling Wages

Take a look at the chart below which was published on The Economic Collapse blog. According to the author:

It is a chart that shows the level of wages and salaries as a percentage of GDP in the United States since the late 1940s.  As you can see, the slice of the pie being taken home by American workers has been dropping like a rock since about 1970....

It just so happens that President Richard Nixon closed the gold window in 1971. This action effectively took the world off the gold standard. As of that date, world currencies were free to inflate -- including the dollar.

The result?

Inflation and capital consumption, resulting in less capital per head of population and falling wages.

Exactly what Ludwig von Mises predicts in his many writings which I have quoted frequently that past couple of weeks.

Here's a relevant quote from Mises' Anti-capitalist Mentality:

All pseudo-economic doctrines which depreciate the role
of saving and capital accumulation are absurd. What constitutes
the greater wealth of a capitalistic society as against
the smaller wealth of a noncapitalistic society is the fact that
the available supply of capital goods is greater in the former
than in the latter. What has improved the wage earners'
standard of living is the fact that the capital equipment per
head of the men eager to earn wages has increased. It is a
consequence of this fact that an ever increasing portion of
the total amount of usable goods produced goes to the wage
earners. None of the passionate tirades of Marx, Keynes and
a host of less well known authors could show a weak point
in the statement that there is only one means to raise wage
rates permanently and for the benefit of all those eager to
earn wages-namely, to accelerate the increase in capital
available as against population. If this be "unjust," then the
blame rests with nature and not with man.

When the dollar was tied to gold, the federal government could not inflate the currency at will without paying the consequence of a run on gold. Gold tied world currencies together. It acted as a backstop to willy-nilly monetary expansion.

When Nixon ended dollar/gold convertibility, the dollar became a fiat currency, as did all world currencies pegged to the dollar. What followed was unrestrained printing of currencies (mainly to finance government spending and keep interest rates artificially low) and steady price inflation. When a currency is inflated and interest rates are kept artificially low, as they are today, there is a disincentive to save, i.e., to accumulate capital. Money saved loses its value. There is an incentive to spend capital. Thus, capital is consumed and wages fall.

We are living today with the dire consequences of Nixon's 1971 decision to end dollar/gold convertibility.

Wanted: Common Sense And Moral Courage

More wisdom from Ludwig von Mises' Planned Chaos:

The planners pretend that their plans are scientific and that there cannot be disagreement with regard to them among well-intentioned and decent people. However, there is no such thing as a scientific ought. Science is competent to establish what is. It can never dictate what ought to be and what ends people should aim at. It is a fact that men disagree in their value judgments. It is insolent to arrogate to oneself the right to overrule the plans of other people and to force them to submit to the plan of the planner. Whose plan should be executed? The plan of the CIO or those of any other group? The plan of Trotsky or that of Stalin? The plan of Hitler or that of Strasser?

When people were committed to the idea that in the field of religion only one plan must be adopted, bloody wars resulted. With the acknowledgment of the principle of religious freedom these wars ceased. The market economy safeguards peaceful economic co-operation because it does not use force upon the economic plans of the citizens. If one master plan is to be substituted for the plans of each citizen, endless fighting must emerge. Those who disagree with the dictator's plan have no other means to carry on than to defeat the despot by force of arms.

Does anyone disagree that what Mises says is just plain common sense?

Would grocery shopping remain a peaceful activity if government were to mandate that individuals could no longer shop for themselves and their families, but that all grocery shopping would henceforth have to be done by neighborhood bureaucrats acting collectively through a neighborhood shopping authority? Suddenly food shopping would become a highly argumentative, political and controversial activity. Individuals would argue among themselves about which particular foods the neighborhood authority should buy and about how these foods should be fairly distributed among neighborhood residents.

Americans would have to be absolute idiots to endorse such a foolish plan. Yet, Americans long ago adopted such a plan with regard to educating their children. Now we argue over which textbooks our official neighborhood schools should mandate, what subjects their unionized public teachers should teach, what extra-curricular activities their official sociologists should allow, whether they should allow boys and girls to compete in the same athletic contest, what holidays the school administration should allow our children to observe... The list is endless and it will remain endless and contentious so long as we insist that our society's educational system be organized on a dictatorial, one-size-fits-all, public basis.

In the last two years Americans, through their governmental representatives, decided that health care and health insurance in America be organized as a dictatorial, one-size-fits-all public authority. Is it any wonder that every second since this controversial decision was made political infighting, rancor and vitriol has ruled the day? Now the government mandates not only that we must purchase health insurance, it also mandates which procedures are essential and which are not, which procedures are "covered" and which are not, who is eligible to receive treatment and who is not. And the politicization of the medical industry which we have experienced so far is only the tip of the iceberg. Yet, for various stupid, dictatorial or selfish reasons, a good portion of Americans want the government to continue its massive intervention in the medical market.

Government planners and politicians tell us that education and medicine are unique fields of human endeavor, that the problems and issues in these fields are scientific in nature and are best solved by technological experts. They say the same thing about environmental and nutritional issues. The risk to the planet of global warming is far too great to entrust to the personal whims of common individuals in the marketplace. Scientists and technical experts must decide for us what type of energy is best to produce, which kinds of cars are best to drive, what kinds of crops are best to grow. "Best" is not a subjective value judgement but an objective, scientific fact.

By this logic what is "best" for us to eat cannot be an issue of personal taste. Professional experts and dieticians know which foods are healthy for us to consume and which are not. They lobby for Congress to ban sugar, salt, fast foods, candies and a whole spectrum of forbidden fruit. Will it be long until the long arm of the federal government DOES mandate that our food shopping be done by neighborhood experts rather than individuals?

Have we lost our common sense?

Mises continues:

The problems of society's economic organization are not suitable for light talk at fashionable cocktail parties. Neither can they be dealt with adequately by demagogues haranguing mass assemblies. They are serious things. They require painstaking study. They must not be taken lightly.

The socialist propaganda never encountered any decided opposition. The devastating critique by which the economists exploded the futility and impracticability of the socialist schemes and doctrines did not reach the moulders of public opinion. The universities were mostly dominated by socialist or interventionist pedants not only in continental Europe, where they were owned and operated by the governments, but even in the Anglo-Saxon countries. The politicians and the statesmen, anxious not to lose popularity, were lukewarm in their defence of freedom. The policy of appeasement, so much criticized when applied in the case of the Nazis and the Fascists, was practised universally for many decades with regard to all other brands of socialism. It was this defeatism that made the rising generation believe that the victory of socialism is inevitable.

It is not true that the masses are vehemently asking for socialism and that there is no means to resist them. The masses favour socialism because they trust the socialist propaganda of the intellectuals. The intellectuals, not the populace, are moulding public opinion. It is a lame excuse of the intellectuals that they must yield to the masses. They themselves have generated the socialist ideas and indoctrinated the masses with them. No proletarian or son of a proletarian has contributed to the elaboration of the interventionist and socialist programmes. Their authors were all of bourgeois background. The esoteric writings of dialectical materialism, of Hegel, the father both of Marxism and of German aggressive nationalism, the books of Georges Sorel, of Gentile and of Spengler were not read by the average man; they did not move the masses directly. It was the intellectuals who popularized them.

The intellectual leaders of the peoples have produced and propagated the fallacies which are on the point of destroying liberty and Western civilization. The intellectuals alone are responsible for the mass slaughters which are the characteristic mark of our century. They alone can reverse the trend and pave the way for a resurrection of freedom.

Not mythical "material productive forces," but reason and ideas determine the course of human affairs. What is needed to stop the trend towards socialism and despotism is common sense and moral courage.

Despite Mises' warning, individual Americans seem perfectly at ease allowing their future to be mapped out for them by powerful, intellectual elites planning what is best for all at Washington cocktail parties and in smoke-filled rooms at political conventions. Individual Americans would rather cede authority to the intellectuals, the politicians and the scientists than fend for themselves.

Who is left among us with the "common sense and moral courage" needed to resist this "trend towards socialism and despotism?"

Certainly not the young. Most young people are empty-headed products of the very public school system mandated by decades of educational "experts." They are self-absorbed, celebrity-enthralled sycophants with the attention span of a gnat. They don't think, they chant. They are chronic complainers who spend their time and resources soothing their paranoia and satisfying their ego with sex, drugs, and social idolatry. Those under 65 overwhelmingly voted for Obama's dictatorial, one-size-fits-all agenda in 2008.

Certainly not the old who either have learned too late or have given up the fight.

Certainly not "single moms" who are probably the individuals in America most dependent on federal government largesse.

Certainly not those privileged by government subsidies and grants. Certainly not the thirty-somethings who flock to law schools and then to Washington to become part of the elite and those who cling to those in power. Certainly not the Wall Street financiers and corporate insiders who sleep with federal power in order to wield it and, in the process, enrich themselves and their snot-nosed, silver-spooned progeny.

Who then? Who then is left with the necessary "common sense and moral courage" to carry on the resistance against tyranny?

You?

Progressivism = Totalitarian Socialism

Progressives will chastise me for making such a politically incorrect statement. "You're name-calling," they'll say. "You're inflaming passions. You're lying! Absurd! Nothing could be further from the truth!"

Really?

Many advocates of interventionism are bewildered when one tells them that in recommending interventionism they themselves are fostering anti-democratic and dictatorial tendencies and the establishment of totalitarian socialism. They protest that they are sincere believers and opposed to tyranny and socialism. What they aim at is only the improvement of the conditions of the poor. They say that they are driven by considerations of social justice, and favour a fairer distribution of income precisely because they are intent upon preserving capitalism and its political corollary or superstructure, viz., democratic government.

What these people fail to realize is that the various measures they suggest are not capable of bringing about the beneficial results aimed at. On the contrary they produce a state of affairs which from the point of view of their advocates is worse than the previous state which they were designed to alter. If the government, faced with this failure of its first intervention, is not prepared to undo its interference with the market and to return to a free economy, it must add to its first measure more and more regulations and restrictions. Proceeding step by step on this way it finally reaches a point in which all economic freedom of individuals has disappeared. Then socialism of the German pattern, the Zwangswirtschaft of the Nazis, emerges.

Ludwig von Mises, Planned Chaos, 1947

Let's review this week in the news and see what our little, progressive tyrants were working on:

Obama announces new housing refinance plan
Our Maximum Leader was hard at work devising a plan which forces us to pay for our neighbor's mortgage. I can see that. Why can't you?

Obama To Homeowners: "Programs We Put Forward Haven't Worked At The Scale We Hoped"
By the way, this week's plan wasn't Maximum Leader's first attempt and it won't be his last. As Mises writes: "If the government, faced with this failure of its first intervention, is not prepared to undo its interference with the market and to return to a free economy, it must add to its first measure more and more regulations and restrictions."

Obama: I Want An Economy "Where We're Making Stuff And Selling Stuff And Moving It Around"
Notice the operative words in this tyrannical headline are: "I want." Totalitarian socialists know what is best for you and, by God, Maximum Leader is going to see you get it! Good thing totalitarian socialists are benevolent and wise!

Treasury ups auto bailout loss estimate
Oops. Maybe not that wise, just benevolent. We must give credit where credit is due. Maximum Leader did save some jobs which we all realize is Job Number One of Maximum Leaders. It's just a coincidence that the jobs saved were those of UAW union thugs who make a hundred grand a year and regularly vote for Maximum Leader.  

Ener1, Parent of Obama-Backed Green Company, Files for Bankruptcy
Double oops! What happens when one of Maximum Leader's favorite crony businesses stops "making stuff and selling stuff and moving it around?" You the taxpayer are strong-armed into picking up the tab, that's what!

Drip, Drip, Drip: Yet Another Green Energy Stimulus Recipient Hits the Skids (the third this week!)
Triple oops! If this keeps up the stupid among us may finally realize that this totalitarian socialist is neither benevolent nor wise... ...Naw. Maximum Leader has a blank check from the stupid to fight man-made global warming because it's surely going to be our Waterloo, right?

Signs Of Strengthening Global Cooling
Wrong. What's a Maximum Leader to do in the face of such earthly confusion?

ObamaCare’s latest assault on freedom
Go on to bigger and better things. Like forcing Catholics to do his bidding (offering contraceptive and abortion services) regardless of their personal and individual beliefs. Or how about changing the subject...

Sugar Should Be Regulated As Toxin, Researchers Say
How long before Mrs. Maximum Leader is raiding your pantry? Can't happen, you say!

Sugar Tariffs Cost Americans $3.86 Billion in 2011
You're probably right. Banning sugar while at the same time subsidizing its domestic production would even be too nutso for the little sub-Maximum Leaders in Congress, right? There IS one thing consistent in all this craziness: You, the American taxpayer, are being forced to foot the bill!

Bernanke urges caution in overly rapid deficit cutting
Even though Maximum Leader is omniscient and omnipotent, he can't be expected to rule all by himself. He has little mini-totalitarian socialist bureaucrats to help him out. Bernanke is the dictatorial elf in charge of our money. His chief responsibility is making sure that it doesn't lose its value. How much has the price of bread and milk gone up the last few years? ...Really? Gee, maybe that's because for the last few years we've engaged in "overly rapid deficit cutting." Come on, folks. Use your head!

The Great Divorce
We have smart intellectuals in this country to help us do just that: use our head! In this inspired piece of work, David Brooks, the guru savant at the NY Times, gushes about a new book by Charles Murray: "Coming Apart." You remember Charles Murray? The author of "The Bell Curve?" The guy who thinks Jews are more prosperous than blacks because they're naturally smarter?


Brooks says he'll be "shocked if there’s another book that so compellingly describes the most important trends in American society... ...Murray’s basic argument is not new, that America is dividing into a two-caste society."

Brilliant! No wonder Maximum Leader relies on the likes of David Brooks to educate us stupid masses. In classic, totalitarian socialist fashion Brooks puts his finger on what Maximum Leader needs to do next in our best interests: "force" the two castes to be friends:

[W]e need a National Service Program," Brooks writes. "We need a program that would force members of the upper tribe and the lower tribe to live together, if only for a few years. We need a program in which people from both tribes work together to spread out the values, practices and institutions that lead to achievement.If we could jam the tribes together, we’d have a better elite and a better mass.

You see, you stupid numbskulls in flyover country, what this country needs more than anything else is "better" tribes. The way to accomplish this is at gunpoint. Maximum Leader should force all us tribal natives -- those from Yale as well as those from the ghetto -- to spend a few years making nice together on the same playground. Brooks probably wouldn't go so far as to call these playgrounds re-education camps, but what the hell? If it works, who cares what they're called?

So what do you think, boys and girls? Is equating Progressivism with Totalitarian Socialism really jumping the shark or what?

The Arrogance and Futility of Obamanomics

According to this article in the Washington Post:

President Obama on Wednesday made his latest pitch to lift the nation’s beleaguered housing market, unveiling a series of proposals to help struggling borrowers reduce their monthly payments and to stem the continuing slide in real estate prices.

Mr. Obama's proposal includes coercing mortgage lenders to lower monthly mortgage payments to a rate affordable by those currently holding mortgages which are "under water." The proposal also coerces taxpayers to further subsidize mortgage rates on a "matching" basis. Reportedly, Obama's plan to intervene in the housing market "would cost taxpayers between $5 billion and $10 billion." Mr. Obama proposes to "pay" for this intervention by intervening in financial markets by "imposing a new tax on the profits of financial firms."

This is not the first intervention in the housing market by the the Obama administration:

The proposals are the latest in a long list of programs Obama has unveiled to address the problems facing homeowners. Almost all of the programs have fallen far short of their goals. Obama has acknowledged that his response to the housing crisis has not worked as well as he had hoped it would, and most economists say that the depressed housing market is one of the biggest drags on the economic recovery.

Despite all the President's interventions over the past three years, housing prices continue to slide. Why? Ludwig von Mises answered this question over sixty years ago in this essay on the futility of interventionism (from Planned Chaos, 1947):

The system of the hampered market economy, or interventionism, differs from socialism by the very fact that it is still a market economy. The authority seeks to influence the market by the intervention of its coercive power, but it does not want to eliminate the market altogether. It desires that production and consumption should develop along lines different from those prescribed by the unhindered market, and it wants to achieve its aim by injecting into the working of the market orders, commands and prohibitions for whose enforcement the police power and its apparatus of coercion and compulsion stand ready. But these are isolated interventions; their authors assert that they do not plan to combine these measures into a completely integrated system which regulates all prices, wages and interest rates, and which thus places full control of production and consumption in the hands of the authorities.

However, all the methods of interventionism are doomed to failure. This means: the interventionist measures must needs result in conditions which from the point of view of their own advocates are more unsatisfactory than the previous state of affairs they were designed to alter. These policies are therefore contrary to purpose.

Minimum wage rates, whether enforced by government decree or by labour union pressure and compulsion, are useless if they fix wage rates at the market level. But if they try to raise wage rates above the level which the unhampered labour market would have determined, they result in permanent unemployment of a great part of the potential labour force.

Government spending cannot create additional jobs. If the government provides the funds required by taxing the citizens or by borrowing from the public, it abolishes on the one hand as many jobs as it creates on the other. If government spending is financed by borrowing from the commercial banks, it means credit expansion and inflation. If in the course of such an inflation the rise in commodity prices exceeds the rise in nominal wage rates, unemployment will drop. But what makes unemployment shrink is precisely the fact that real wage rates are falling.

The inherent tendency of capitalist evolution is to raise real wage rates steadily. This is the effect of the progressive accumulation of capital by means of which technological methods of production are improved. There is no means by which the height of wage rates can be raised for all those eager to earn wages other than through the increase of the per capita quota of capital invested. Whenever the accumulation of additional capital stops, the tendency towards a further increase in real wage rates comes to a standstill. If capital consumption is substituted for an increase in capital available, real wage rates must drop temporarily until the checks on a further increase in capital are removed. Government measures which retard capital accumulation or lead to capital consumption—such as confiscatory taxation—are therefore detrimental to the vital interests of the workers.

Credit expansion can bring about a temporary boom. But such a fictitious prosperity must end in a general depression of trade, a slump.

It can hardly be asserted that the economic history of the last decades has run counter to the pessimistic predictions of the economists. Our age has to face great economic troubles. But this is not a crisis of capitalism. It is the crisis of interventionism, of policies designed to improve capitalism and to substitute a better system for it.

No economist ever dared to assert that interventionism could result in anything else than in disaster and chaos. The advocates of interventionism--foremost among them the Prussian Historical School and the American Institutionalists—were not economists. On the contrary. In order to promote their plans they flatly denied that there is any such thing as economic law. In their opinion governments are free to achieve all they aim at without being restrained by an inexorable regularity in the sequence of economic phenomena Like the German socialist Ferdinand Lassalle, they maintain that the State is God.

The interventionists do not approach the study of economic matters with scientific disinterestedness. Most of them are driven by an envious resentment against those whose incomes are larger than their own. This bias makes it impossible for them to see things as they really are. For them the main thing is not to improve the conditions of the masses, but to harm the entrepreneurs and capitalists even if this policy victimizes the immense majority of the people.

In the eyes of the interventionists the mere existence of profits is objectionable. They speak of profit without dealing with its corollary, loss. They do not comprehend that profit and loss are the instruments by means of which the consumers keep a tight rein on all entrepreneurial activities. It is profit and loss that make the consumers supreme in the direction of business.It is absurd to contrast production for profit and production for use. On the unhampered market a man can earn profits only by supplying the consumers in the best and cheapest way with the goods they want to use. Profit and loss withdraw the material factors of production from the hands of the inefficient and place them in the hands of the more efficient. It is their social function to make a man the more influential in the conduct of business the better he succeeds in producing commodities for which people scramble. The consumers suffer when the laws of the country prevent the most efficient entrepreneurs from expanding the sphere of their activities. What made some enterprises develop into "big business" was precisely their success in filling best the demand of the masses.

Anti-capitalistic policies sabotage the operation of the capitalist system of the market economy. The failure of interventionism does not demonstrate the necessity of adopting socialism. It merely exposes the futility of interventionism. All those evils which the self-styled "progressives" interpret as evidence of the failure of capitalism are the outcome of their allegedly beneficial interference with the market. Only the ignorant, wrongly identifying interventionism and capitalism, believe that the remedy for these evils is socialism. [emphasis added]

There you have it. All of Mr. Obama's efforts to make life "easier for homeowners" at the expense of taxpayers and financial industry profits are doomed to failure before they begin. Still, Mr. Obama and the economic whiz kids who surround him continue to make proposal after failed proposal.

Cynics might refer to such dogged efforts to control housing prices by intervening in the marketplace as insanity or pure, political pandering. In all probability it is simple stupidity. Despite the plethora of economic doctorates bestowed on Mr. Obama's advisers, these meddlers remain clueless about economics. Instead of stepping back and allowing the judgement of consumers to hold sway over housing prices by means of the inexorable law of supply and demand, these hapless interventionists continue to throw good taxpayer money after bad, prolonging the inevitable and accelerating the consumption of capital.

However, these futile interventionist measures could not thrive were they not abetted by the economic stupidity of the media and the general electorate. In our day there is an all too general belief that the "State is God," that it can accomplish by decree whatever it wishes. All that is needed for the State to succeed in its various interventions is a Godly plan proposed by the right variety of Godly authorities. Mindful of their human imperfection, these authorities acknowledge that their first few, interventionist attempts may fall short of their purpose. But Godly success is inevitable with wise, diligent and well-meant persistence.

Sadly, their unspeakable arrogance and stupidity are dragging the rest of us to inevitable economic doom.

Capitalism Is Outdated!!!

Perhaps you've seen this article linked in the Drudge Report: Davos elites to seek reforms of 'outdated' capitalism. It begins:

Economic and political elites meeting this week at the Swiss resort of Davos will be asked to urgently find ways to reform a capitalist system that has been described as "outdated and crumbling."

Here's an opinion on the subject: 

The characteristic mark of this age of dictators, wars and revolutions is its anti-capitalistic bias. Most governments and political parties are eager to restrict the sphere of private initiative and free enterprise. It is an almost unchallenged dogma that capitalism is done for and that the coming of all-round regimentation of economic activities is both inescapable and highly desirable.

None the less capitalism is still very vigorous in the Western Hemisphere. Capitalist production has made very remarkable progress even in these last years. Methods of production were greatly improved. Consumers have been supplied with better and cheaper goods and with many new articles unheard of a short time ago. Many countries have expanded the size and improved the quality of their manufacturing. In spite of the anti-capitalistic policies of all governments and of almost all political parties, the capitalist mode of production is in many countries still fulfilling its social function in supplying the consumers with more, better and cheaper goods. 

It is certainly not a merit of governments, politicians and labour union officers that the standard of living is improving in the countries committed to the principle of private ownership of the means of production. Not offices and bureaucrats, but big business deserves credit for the fact that most of the families in the United States own a motor car and a radio set. The increase in per capita consumption in America as compared with conditions a quarter of a century ago is not an achievement of laws and executive orders. It is an accomplishment of business men who enlarged the size of their factories or built new ones.

One must stress this point because our contemporaries are inclined to ignore it. Entangled in the superstitions of statism and government omnipotence, they are exclusively preoccupied with governmental measures. They expect everything from authoritarian action and very little from the initiative of enterprising citizens. Yet, the only means to increase well-being is to increase the quantity of products. This is what business aims at.

It is grotesque that there is much more talk about the achievements of the Tennessee Valley Authority than about all the unprecedented and unparalleled achievements of American privately operated processing industries. However, it was only the latter which enabled the United Nations to win the war and today enables the United States to come to the aid of the Marshall Plan countries.

The dogma that the State or the Government is the embodiment of all that is good and beneficial and that the individuals are wretched underlings, exclusively intent upon inflicting harm upon one another and badly in need of a guardian, is almost unchallenged. It is taboo to question it in the slightest way. He who proclaims the godliness of the State and the infallibility of its priests, the bureaucrats, is considered as an impartial student of the social sciences. All those raising objections are branded as biased and narrow-minded. The supporters of the new religion of statolatry are no less fanatical and intolerant than were the Mohammedan conquerors of Africa and Spain.

History will call our age the age of the dictators and tyrants. We have witnessed in the last years the fall of two of these inflated supermen. But the spirit which raised these knaves to autocratic power survives. It permeates textbooks and periodicals, it speaks through the mouths of teachers and politicians, it manifests itself in party programmes and in plays and novels. As long as this spirit prevails there cannot be any hope of durable peace, of democracy, of the preservation of freedom or of a steady improvement in the nation's economic well-being.    Ludwig von Mises, 1947

My point?

Nothing has changed in the last 65 years except the virulence with which the free market is berated.

Will we ever learn?