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!

UPDATED: When Passion Turns Deadly

Economics has always been my passion. Why? I enjoy the logic of it. Unraveling the logic of economic arguments to me has the allure that crossword puzzles have on others.

In college I had a latent interest in economics. However, my professors with their mathematical and Keynsian mumbo-jumbo turned me off. Then I started to read Ayn Rand. Then Harry Browne. Then Hayek. And, finally, Ludwig von Mises. At last I had found not only a teacher and theorist who believed that the logic of his economic arguments lead to inexorable truth, but also a philosopher who demonstrated convincingly why this must be so.

As I read more and studied more I was fascinated by the difference between economic truth as Mises unveiled it and the economics understood and practiced by main stream academia and politicians. I approached this difference as an intellectual curiosity. All of Mises' theory (Austrian Economic Theory) predicted the certain outcome of the fiscal and monetary policies employed by the government of the United States: inflation and, eventually, monetary collapse.

That was in the 70's and 80's. Today what is happening to the lifeblood of our economy -- money -- is no longer an intellectual curiosity. Today we are staring life and death in the eye, literally.

I think many in Washington and academia believe, either because of their Keynsian training or massive egos, that the US monetary system is absolutely controllable and indestructible. Federal spending, public debt, Federal Reserve money-printing, zero interest rates...none of these policies, so those in charge believe, will have any detrimental effect on our fiat money system, on our business habits, on our individual, economic decisions.

How foolish! What was understood a hundred years ago, not by economists, but by men of sound, common sense is today scoffed at and discarded. Today's ignorant and arrogant authorities, enabled by an ignorant and amoral public, are destroying the American way of life: private property and individual freedom. They are doing it by destroying our means of surviving in this society: our money.

Without a sound and trusted money individuals have no choice but to revert to barter and a self-sufficient, hand-to-mouth existence. Money is the key to maintaining the complex system of the division of labor that has been hundred of years in the making and has brought prosperity to millions over the years and today. When money is destroyed, that system of the division of labor cannot be sustained. When money is destroyed, individuals who depended on a store of money for their very survival are left helpless. The old and infirm are the first victims. They are threatened by hunger and loss of shelter. They will eventually be reduced to begging...or they will die.

When the system of the division of labor can no longer support government largesse, the next victims are those who depend on government handouts for their survival. Being ignorant, they cannot understand why government is no longer able to provide for their needs. Those responsible in government, who turn to "austerity" policies in an attempt to keep their wealth redistribution schemes viable, are called greedy, uncaring and unfeeling. Those losing their government stipends and subsidies take to the streets.

There is no good that comes from the destruction of money. Progress is halted. Indeed, our standard of living reverts to levels of hundreds of years ago. In our modern society, the destruction of money results in panic, conflict, riots, destruction and death.

There is still time to turn things around, but I seriously doubt there is the will to do what must be done.

UPDATE: This article by Ralph Benko, entitled "Fiat Money: The Root Cause of Our Financial Disaster," is an apt study guide for those who doubt the power of a "sound and trusted money" to secure property, freedom and prosperity.

Benko writes: 

There is ample evidence that restoring gold convertibility would put the world back on the path to jobs, growth, and a balanced federal budget. Politicians do not like messing around with monetary policy. But gold, recently rediscovered by the tea party, has an impressive technical, economic, and political pedigree of gold convertibility and a very well established track record of job creation, properly applied, during many eras.

Our Washington ruling elite has no taste for restoring sound money. The windfall it reaps from debauching money is too precious to our ruling powerbrokers. Fiat money manipulation is the very source of their power and wealth. Restoring sound money will have to be accomplished by individuals, the states and upstart political thinkers like members of the Tea Party.

Good Article By The Country Thinker

I like The Country Thinker blog. Today Ted Lacksonen analyzes an article in the Wall Street Journal by Professor Alan Blinder. Terrific. It moved me to comment:

Mr. Blinder illustrates the problem that economic elites have trying to figure out what's going on in the "economy" using macro-economic data, much less prescribing a "fix" for what they think is "wrong." Observing the "economy" is like observing thousands of fans pouring out of a stadium after a football game and trying to predict their post-game behavior. Will they get in their cars and drive straight home? Meet at a bar for pizza? Catch a plane?

Millions of variables affect the choices individuals make. Trying to pin down which variable is key to what we decide to do is futile. Most of the time economists use their statistics to prove what they want to prove. Competent economists use rational economic theory to explain what they observe, not the other way around. Blinder gives away the store when he observes: "As a mat­ter of pure logic that could be true."

No, Mr. Blinder, as a matter of pure logic something is either true, i.e., correctly deduced from true premises, or not. If his premises are true and his logic is correct, then -- as a matter of pure logic -- Blinder must explain how his observations can trump his logic. Unless, of course, his premises are not true.

Businessmen are hard-pressed to expand their business and, thereby, create jobs, if inventory is piling up and all their sales staff hears from customers is "maybe next year." There are a thousand and one reasons why businessmen and individuals hold their money instead of spend it. Fear and uncertainty are reasons as good as any.

Businessmen and individuals alike want to be creating, producing and trading. So what's the problem? In our advanced society we don't barter. The life blood of our human affairs is money. When deciding what money is worth at any given moment, we take our cues from interest rates, the price of groceries, the taxes we pay and the progression of federal spending from millions to billions and trillions. Then we decide whether to buy that stock or that robotic machine or to hire that extra employee, or to keep our assets nearby in liquid cash.

The more Blinder, Bernanke and friends mess with our money in order to cajole us into creating, producing and trading again, the more confused, scared and uncertain we become.

Mr. Blinder, how about you just stop trying to help us, leave our money alone and get the hell out of our way?

Check out Ted's words of wisdom here.