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Missing the Point
The Economist recently interviewed Ron Paul about HR 1207, “The Federal Reserve Transparency Act Of 2009″, which he sponsored and which currently has some two-hundred and seventy cosponsors (it is more popularly called the audit the Fed bill). Ron Paul as usual does a commendable job answering the various questions put to him by the somewhat snarky interviewer. Like most in Washington, the interviewer clearly thinks that inquiring attitudes towards the Federal Reserve’s everyday operations are, as he puts it, “potentially dangerous.” I think the truth is exactly the opposite: the attitude of viewing the Federal Reserve as sacrosanct is dangerous. And not just “potentially”, either. The last ninety-six years of living with a central bank have shown full well the dangers inherent in such an institution, what with inflation, business cycles, and the like.
Basically, the biggest problem the interviewer seems to have with the idea of making the Fed more transparent and therefore giving Congress a greater ability to “oversee” the bank is that it might weaken the Fed’s political independence. This would be a bad thing, the interviewer argues, because Congress may pressure the Federal Reserve into taking politically popular but economically disastrous steps (for instance, raising interest rates to put a brake on inflation which would have the effect of slowing down the economy).
This particular criticism misses the point of Paul’s bill by leaps and bounds, however. First, the bill doesn’t give Congress anymore “power” over the Fed than it already has (which is very little). Anyone can read the bill for itself here. It is extremely short, and merely changes Section 714 of title 31 of the United States Code to allow the Comptroller General to audit the Fed at will, instead of having to get the permission of the Federal Reserve and its member banks to do so. Seems like a pretty reasonable demand, right? Is there any other section of the Federal Government that gets the convenience of choosing to be audited or not?
Second, the interviewer misses the target of this bill by focusing on the Fed’s manipulation of the interest rates which can sometimes be politically unpopular. But where the Federal Reserve wants interest rates to be is probably if anything the most transparent aspect of Federal Reserve policy. A simple Google News search found an article from a few weeks ago indicating the New York Federal Reserve was going to buy 7.5 trillion dollars worth of government securities in an attempt to…”lower long-term borrowing costs and revive economic growth.” Unless I’m mistaken here I really doubt the Federal Reserve is rushing to have a gag order put on Reuters for revealing such sensitive information. In other words the interest rate policy is right out in the open for Congress to see if it so chooses.
Interest rate policy is not the driving factor behind Ron Paul’s sponsoring of this bill. If it were it would not explain why it has so many supporters in Congress. While some commentators may care that the Fed controls interest rates, Congress certainly doesn’t. The whole point of the Federal Reserve is to control monetary policy. The simple reason why the bill has been supported by such an ideologically diverse group is simple: the Federal Reserve refuses to disclose who is receiving the money it is handing out to troubled banks. In fact, back in December the Federal Reserve expanded its balance sheet by 2 trillion dollars with zero oversight from anyone but the seven members of the Federal Reserve Board and then refused to let anyone know where that money went. Could it really be so difficult to understand why Congress would want to find out where that money is going?
As Ron Paul points out in the interview, the bill is really political in nature and aimed not so much at monetary policy per se which, as pointed out above, is largely seen to be the legitimate function of the Federal Reserve. The real issue at stake is what we don’t know. To be more specific, we don’t know who specifically is getting the money. We also don’t know why they are getting the money. When the nation’s money supply rests in the Fed’s hands do we really want to assume the Fed is made up of altruistic do-gooders, which is exactly what they want us to believe? To put it another way, if Lord Acton’s dictum, “absolute power corrupts absolutely”, is an even slightly correct description of human nature, can we really afford to let the Federal Reserve be independent?
Top 3 for April 15th
Once upon a time the Constitution stood as a bulwark against state power. Then came the progressive era where up become down, wrong become right, and big business manipulated the law to enrich themselves at the common person’s expense. During the midst of those dark days, Wilson signed into law the 16th amendment, effectively committing IP infringement against Karl Marx. No, but really the 16th Amendment allowed for the income tax (a progressive tax) which was one of the ten planks of communism. A principle part of communism became enshrined into our Constitution in 1913, changing the role of the constitution from bulwark to facilitator of state power.
Paul Craig Roberts, former Assistant Secretary of the Treasury under Reagan, explains how the income tax has put us into a position comparable to the medieval serf.
2. Payback
President Obama, hard at work garnering funds for his war in Afghanistan by using a special troop funding provision he voted against as a senator, is setting America up for another Vietnam style exit in central Asia. Former Chief of the Bin Laden Issue Station of the CIA Michael Scheuer presents evidence that a land war with Russia may be looming in our future as the U.S. is forced to draw on the help of Russia in subduing Afghanistan.
1. Green Cities, Brown Suburbs
Edward Glaeser, an economist at Harvard, presents evidence that him and fellow economist Matthew Kahn have compiled showing that, paradoxically, bigger cities can actually be better for the environment then trying to “live green” out in the country. The article is long, but well worth it for the treasure trove of interesting statistics.
Top 3 of the Day
Today will be the start of something I hope to do once a day: Post what are, in my opinion, the top three articles I read from around the web for that particular day. Nothing too extravagant. I may even add some commentary here and there. So let us dive right into the top three articles on the web for April 14th, 2009…
University of Chicago Law Professor Richard has never been very kind to the Federal Drug Administration. Why, he even wrote a 296 page bookon why the FDA is royally screwing consumers of medicine, not to mention the hundreds of other papers, chapters and op-eds he has written over his long career also directed at the FDA. In his latest piece for Forbes, Epstein takes a look at the direction the Obama administration seems to be taking the FDA- and he doesn’t come away pleased.
Not only is there some good “current news” in this article, but Epstein really does a fantastic job explaining, in a simple way, why the FDA is more likely to harm people by inadvertently keeping good drugs off the market in an attempt to keep bad drugs from getting through.
2. President’s Preschool Emphasis Is Misdirected
Proverbs 22:6 says “Train up a child in the way he should go: and when he is old, he will not depart from it.” Not to imply that the U.S. Department of Education has been reading the Bible (could anything less compatible even be imagined?), but the government is well learned in the art of subtle indoctrination (thanks Horace Mann!!), and knows exactly where to point its weapons of mass control: Preschoolers. The director of the Cato Institute’s ”Center for Educational Freedom”, Andrew Coulson, examines President Obama’s new plans for expanding Federal control of preschool education. As Coulson points out, government run education is simply awful. It is awful k through 12. It will never achieve anything more then being simply awful. Yet, we will continue to see tax dollars disappear into an ever growing black hole. Very depressing.
1. The ultimate reaping of what one sows: right-wing edition
And coming in at number one of the best articles I read today is a post by the ever-fearless and ever-vigilant Glenn Greenwald on the absolute hypocrisy of the mainstream Republican right on issues pertaining to the current police state we live under. Hard on the heel of two recent reports warning of “Patriot terrorist” groups, the Department of Homeland Defense just today released a recently declassified report warning of “Right-Wing Extremists”. Obviously alarmed by this trend, the right has begun to raise hell (justifiably, in my opinion). Greenwald, however, points out that the enormous Leviathan is basically a product of the mainstream right and their obsession with catching the terrorists after 9/11. Really, the right doesn’t bother to mention that all of these unlawful and unconstitutional surveillance actions were being hatched- and committed- during the eight years of the Bush Administration! They all defended Bush, but now that the guns are being used by someone else they are shrieking in livid rage.
Greenwald also points out that under the Bush administration, the F.B.I. was actually closely monitoring what they considered left wing activist groups. They specifically singled out vegans, poverty workers, and antiwar protesters. Where was the right then, protesting the defilement of our rights? Not a peep. They really are “Great American Hypocrites”.
So take a look at the article. Greenwald is always excellent on civil liberties, and he pulls no punches revealing the right for what they really are.
A short update…
I realize that many of you religiously check my blog every night for a new post*, only be to disappointed as my laziness gets the better of me.
For that I apologize.
But good news is on the way my faithful readers. I promise that I will have a couple of new posts within the next few weeks. I promise.
* Note: This is unconfirmed conjecture meant as an advertisement tool.
The Real America
I stumbled upon this article by the somewhat eccentric writer Bill Kauffman, and I think it is really a beautiful article about America. I highly recommend you read it.
This is a quote from the article I found particularly exceptional.
“So no, I do not feel “ashamed” of my country, for America, as John Fogerty understood, is not Bush or Cheney or Lieberman or Kerry but my friends, my neighbors, and yes, the Grand Canyon, too. Even better, it is the little canyon and the rude stream and Tom Sawyer’s cave and all those places whose names we know, whose myths we have memorized, and whose existence remains quite beyond the ken of the Department of Homeland Security.”
Conservatism as Foreign Policy
In the year 2000, George Bush campaigned (at least partially) on “a humble foreign policy”, as well as the promise to stay away from nation building, explaining that countries need to take the responsibility on themselves.
Conservatives cheered.
Of course, lest one be misled to think of George Bush as a noninterventionist, I can say with quite a bit of certainty looking back on Bush’s record the past couple of years that the only reason he uttered those words was because the democrats had been very interventionist under Clinton (Haiti, Somalia, Kosovo, etc). The republicans, for the most part, opposed those wars, and conservative entertainers like Sean Hannity had a field day accusing Clinton of sending off our troops to die needlessly for a foreign country and spending our tax dollars propping up failed states. The sweet irony is diminished only by the sickening thought of how unprincipled some of these conservative entertainers can be.
But today, the conservative’s once good wisdom has largely diminished since Bush took office. Listen or read the headlines of any conservative media outlet, be it magazines, websites, or radio, and one could largely be forgiven for assuming conservatism was defined solely by one’s view of foreign policy. Peruse any of the numerous conservative blogs on popular sites such as myspace.com and the overwhelming criterion for being a conservative appears to be how much somebody supports war.
It seems to be that the majority of conservatives define conservatism by foreign policy almost exclusively. If you support the war(s) you are a conservative. If you oppose the war(s) you are a liberal (or “libtard” as myspace conservatives ingeniously put it these days). This simplistic view of conservatism defames the rich history of conservatism and classical liberalism going back to Edmund Burke.
The genuine students of conservatism and classical liberalism, though, realize that conservatism is so much more than simply one’s view of foreign policy, or any government policy. What happened to the belief in a natural order, as Russell Kirk has elaborated on? What happened to a belief in natural rights, which our founding fathers held so dear? What about limited government, few laws, and a respect for private property? Does conservatism have anything to do with ethics and culture to these so called conservatives today?
Ann Coulter and other “conservative” entertainers, would have us believe that conservatives are republicans, and liberals are democrats. Republicans good, democrats bad. It is as simple as that. I scanned the index of a couple of Ann Coulter’s books and found no reference to any of the great conservative writers. Edmund Burke was nowhere to be seen. Russell Kirk was entirely absent. Both Bill O’Reilly and Rush Limbaugh’s books followed the same trend as Ann Coulter’s.
Conservatives have become so enamored on foreign policy that they refuse to see conservatism as anything else. Pat Buchanan is a great example of this. Although largely ignored in the conservative press, one would be hard pressed to find someone more conservative than him. The only issue that really distinguishes him from the rest of the conservatives is that he is not an interventionist, and he doesn’t believe in unconditional support for Israel.
Murray N. Rothbard’s book, “The Betrayal of the American Right“, is a disquisitional examination of what he terms the “two Rights, Old and New.” The Old right, which can loosely be said to exist as the Right wing of American politics from the mid-1930s to the 1950s, was defined purely as an opposition movement. The Old Right was in opposition to everything the New Deal and the war economy of WWI had imposed on American politics and society. Their opposition to big government, and believe it or not, war made them far more principled then conservatives today. Today’s conservatives have becomes yesterday’s progressives.
Fortunately, many conservatives today have admitted as much, even if nobody seems to have noticed. This is why they aptly self-title themselves neoconservatives. From Irving Kristol’s admission that neoconservatives don’t really mind big government to Charles Krauthammer’s unyielding support for American hegemony around the world, conservative intellectuals have no qualms supporting ultimately progressive policies and principles while cloaking them in the duplicitous label of “conservatism.”
Gone are the days when conservatives espoused limited government. In the first six years under a so-called “conservative” president, the Department of Education increased spending on K-12 education by 40% and on higher education by nearly as much. We live under the biggest government the world has ever seen, in all of history. And yet we hear conservatives calling for more government. They call for more spending on defense, more bases around the world, and more trade barriers against China. Forget the old phrase, “defend America first“, now its defend Kuwait first, or defend the Iraqis first. Conservatism has become just another side of the coin of progressivism. Sure, they’re not entirely happy with entitlement programs. But whereas conservatives used to support cutting the welfare state and giving the money back to the people, now they support cutting a little of the welfare state and make the warfare state larger!
As Patrick Buchanan put it, the choice before us is between an empire or a republic. We are bankrupt as it is, and are forced to borrow money from the Chinese to finance are ever growing foreign policy. Russell Kirk once said, “Not by force of arms are civilizations held together, but by subtle threads of moral and intellectual principle.” When will conservatives today realize this?
A List of Books
What follows is a small list of the books I read in 2007 that I thought were particularly good. Enjoy!
1. The Costs of War, edited by John V. Denson
This is without a doubt in the top five books I read in 2007. Denson brings together some of the best essays written on war by some of the best historians, economists, and sociologists available. Often times, if people think of the costs of war at all, it usually takes the form of the casualties. Most people either ignore or simply don’t realize the effect that war has on the economy, and the culture of both the winner and loser. This book will slap them firmly into the real world, where actions of consequences. The historical analysis, too, was breathtaking. Specifically, Murray Rothbard’s essay on WWI, entitled World War Fulfillment: Power and the Intellectuals (which can be read online here), detailing how it was the left that wanted war and not the right, and Professor Hans-Hermann Hoppe’s controversial and astonishing essay Time Preference, Government, and the Process of De-Civilization: From Monarchy to Democracy, which I won’t even attempt to describe here but suffice to say is entirely convincing in it’s case that monarchy is superior to democracy.
2. Hegemony or Survival, by Noam Chomsky.
Noam Chomsky, one of America’s most controversial authors and intellectuals, has never been known to hold back his hatred of America’s foreign policy. Agree or disagree, he makes a strong case for whatever he argues for, and anyone defending America’s foreign policy will definitely need to deal with the arguments Chomsky makes in this book. Although I agree with him for the most part, I do disagree with his economics. A self-professed anarcho-syndicalist (whatever that means), his economics are leftist and at times entirely silly. He fails to distinguish between actual free-market capitalism, and state-sponsored corporatism when arguing against America’s entirely unjust actions of economic imperialism in South America and other countries. But all in all, an important book in realizing and analyzing American imperialism.
3. Terrorism and Tyranny, by James Bovard.
James Bovard has been criticized by just about every Federal Agency in existence. This probably means Bovard is right, and the government knows they are wrong. At any rate, this book is an important analysis of the post-9/11 American response to terrorism. Bovard pulls no punches in detailing the excessive abuse of rights, the gross incompetence of the government, and the way Americans naively assume the government is on their side. Also includes a great look at the Israeli response to terrorism, and the Iraq war.
4. By what Standard, By R.J. Rushdoony.
The is really a brilliant evaluation of the philosophy of the late Christian thinker Cornelius Van Til. Rushdoony (a dreadfully boring speaker, but engaging writer) does a nice job of bringing the complex writing style and difficult ideas of Van til to a level probably anyone could understand. Van Til is the “creator” of what is termed “presuppositional apologetics”. Now, I hate the term “apologetics”, and can’t stand calling Van Til’s philosophy “presuppositional apologetics”. Maybe one day I’ll write a post on why, but I simply prefer something like Christian philosophy. At any rate, Van Til’s philosophy states (to put it very simply) that when it comes to claims of ultimate reality, there is no neutrality. Often times, atheists will make the claim that Christian’s “don’t use reason, but instead rely on an appeal to authority, like the Bible”. But this is a very naive accusation. Why assume that “reason” is the final authority on matters of truth? As Greg Bahnsen, one of Van Til’s students, has said, it really comes down to “a question of ultimate commitment.” To think that atheists (or whatever the belief system may be) start off as neutral, and reason their way to truth, is to be incredibly mislead. Reason becomes the final authority, the god ironically enough, of the atheist, and all facts and experience are interpreted through that lens. Anyways, definitely a must read.
5. For a New Liberty, by Murray Rothbard.
If there is any book to read as an introduction to libertarianism and austrian economics, this is the one. I cannot recommend this book enough. Rothbard’s entertaining and clear writing makes this book an easy, fun read, but his provocative ideas really challenge the reader intellectually. Rothbard’s ability to carry concepts out to their logical ends means that not everyone will be comfortable with his ideas, but anyone will be hard pressed to refute them. And of course, when it comes to economics, Rothbard is king. Seeing as his strongest subject was economics, and he contributed a large amount to Austrian theory, the economics he puts forward in For a New Liberty are undeniable in that everything he says is so true. Ok, maybe thats my bias showing, but I challenge anyone to read this book and not come away feeling the same. Also, Rothbard was also a great historian and his analysis of the Soviet foreign policy was a real eye opener for me. Buy it!
A Book I am Reading
Man, Economy, and State the Scholar’s Edition with Power and Market, by Murray N. Rothbard
Admittedly, I’m already having a hard time getting through this book. It is the book to own on Austrian economics, and a clear repudiation of socialism, keynesianism, and any form of economics that advocates government intervention into the economy. Wish me luck!
