Tuesday, September 22, 2009

The Redefinition of Liberal Act of 1933 and the Descent of Obama

A couple of posts originally undertaken two years ago that I've dug up and reexhumined in light of my current burial in the neo-classical economics of Mises and Hayek. The posts have been condensed, revised, extended, and embalmed.

The understanding that the left embodies the antithesis of liberalism is not new. For example, in the forward to Human Action (1949), Mises writes that "I employ the term 'liberal' in the sense attached to it everywhere in the nineteenth century and still today in the countries of continental Europe. This usage is imperative because there is simply no other term available to signify the great political and intellectual movement that substituted free enterprise and the market economy for the pre-capitalistic methods of production; constitutional representative government for the absolutism of kings or oligarchies; and freedom of all individuals for slavery, serfdom, and other forms of bondage."

Not only did the left steal this beautiful word, "liberal," but then went on to spoil it due to their misguided and destructive policies. So now they use another word, "progressive," but the problem is the same, since it is probably fair to say that nothing in the world has accounted for so much human progress as the implementation of classical liberal policies -- most recently in China and India, where nearly a billion people have been lifted from true poverty (not the American kind) since 1990. Prior to that, communist China was obviously a basket case, but so too was India, which was a socialist country from its inception until finally abandoning that dysfunctional approach after the end of the Cold War.

At any given point in our history, progress would have been arrested or slowed if we had adopted the illiberal collectivist policies of the left. As Mises writes, "None of the great modern inventions would have been put to use if the mentality of the pre-capitalistic era had not been thoroughly demolished by the economists. What is commonly called the 'industrial revolution' was an offspring of the ideological revolution brought about by the doctrines of the economists. The economists exploded the old tenets" that had held development in check and were deeply anti-progressive.

But things are no different today. "What is wrong with our age is precisely the widespread ignorance of the role which these policies of economic freedom played in the technological evolution of the last two hundred years." Again, the only way the mystagogic left could avoid this economic reality was to lurch into the pervasive irrationalism, emotionalism, authoritarianism, and anti-intellectualism we see today. Mises called this revolt against reason and liberty "polylogism," whereas now we call it the monocult of multiculturalism or the dreary uniformity of "diversity."

The Forgotten Man is one of the best books ever written on the Great Depression. It's written by a mainstream journalist in a very evenhanded and understated way, to such an extent that a narrow-minded leftist might even be lulled into reading it, only to realize too late that their whole worldview has vaporized. A good alternate title would have been, Everything You Think You Know is Wrong, Moonbat!

It's amazing to me that the angry left was so hysterical about President Bush using his constitutionally valid war powers in a time of war (as is Obama), when FDR explicitly usurped those powers in peace time, greatly expanding the powers of the executive and the size and intrusiveness of the federal government. And once the left gains power -- which necessarily involves diminishing your freedom -- they never give it back. Rather, we must take it back.

Of course the feces have changed, but 75 years later we're still having to deal with the same crappy ideas and policies put into place by FDR and his "brain trust." Naturally, not all of the ideas were bad, but that is purely accidental, since no one gave a thought to the long term consequences of FDR's radical experimentation with the economy.

Speaking of which, this was also the first time professional "intellectuals" played a dominant role in a president's policy making, to the detriment of us all. In science or business, bad ideas are quickly eliminated, but in government and academia, the beloved abstraction of some tenured pinhead can live on forever -- for example, price supports for farmers, i.e., paying them to grow fewer crops in order to keep prices artificially high, or giviing grants to self-styled artists to produce pro-statist propaganda. Those are just two of hundreds of leftist ideas that seem impossible to eradicate. Or even discuss.

Instead of dealing in reality, the left habitually deals in myth and image, and there is no bigger myth than the idea that FDR rescued the economy from the Great Depression. To the contrary, it is now well understood by mainstream economists that his economic acumen was essentially nil, and that he aggravated the Depression at every turn, causing it to last many years longer than it otherwise would have.

Five years after FDR took office, we were in the midst of a "depression within a depression," with unemployment at 17.4%. The Dow didn't return to pre-Depression levels until the mid-1950s. "Washington had already made thousands of efforts to help the economy," writes Shlaes, "yet those efforts had not brought prosperity."

I remember learning in school that the Wall Street crash of 1929 was central to the length and depth of the Depression, but this isn't true at all, and simply plays into leftist mythology. I remember even learning about it in the moralizing terms with which the left approves -- that the crash was caused by "greed," i.e., buying stocks on margin, and speculating on the market with no understanding of the underlying economic fundamentals. That part is true enough, just as it was true with the tech bubble of the 1990s and the real estate bubble of 2008. And when this happens, economic reality returns in the form of a market "correction."

But the correction was not the disaster it is made out to be. Much worse was what came after, in the government's repeated attempts to cure the problems created by the economy's own auto-regulation. In hindsight, it's perhaps easy to unfairly apportion too much blame to FDR for the disastrous economic policies he put into place, since we know so much more about economics today than anyone did back then, just as it's hard to blame medical doctors in the 1930s for knowing so much less about medicine than we do today.

True, there's usually no need to assign malevolent motives for something that is more easily explained by stupidity or ignorance. But while FDR displayed plenty of economic ignorance, I was actually surprised at how much sheer malevolence he engaged in as well -- or at best, transparent power politics. So much of what he did was about power and political advantage, which is one of the reasons his policies were so incoherent and at times contradictory. Mainly, he wanted to create the perception that he was doing something, which is an advantage that leftists have had ever since FDR, since doing nothing is always preferable to doing the wrong something, but it's a much tougher sell. It's one of the main reasons it's difficult for a real conservative to get elected, since a gargantuan state capable of bestowing favors creates an intrinsically corrupt system of incentives.

At the time FDR took office, the federal government was so small -- smaller than many state and local goverments -- that it couldn't do what it does today, which is to essentially bribe this or that constituency in order to maintain and expand its power. But in his second inaugural address, Roosevelt said that he was seeking "unimagined power" -- ironically, the kind of real power that the paranoid left fantasized President Bush was seeking! The word "fascist" is routinely thrown out by the left, but one thing a fascist cannot be is a small-government liberal (which, of course, President Bush was not).

This has been the leftist strategy ever since FDR, and is the reason why the left does not consist of ideas but merely interest groups and emotional appeals. It's difficult for a true conservative to compete in such a climate, since his only promises are his ideas and ideals, including the idea that he will stop giving interest groups free stuff if they vote for him, and the ideal that people should be more self-reliant and not expect government to bail them out.

"Roosevelt systematized interest-group politics more generally to include many constituencies -- labor, senior citizens, farmers, union workers [and, one might add, southern racists]. The president made groups where only individual citizens or isolated cranks had stood before, ministered to those groups, and was rewarded for it with votes." Roosevelt "believed in a future of scarcity.... Growth would not provide for the poor; only redistribution could." It is no coincidence that 1936 was the first peace-time year that federal spending surpassed that of local governments. That's a lot of bribes to pay out. The recent Porkulus monstrosity proves that nothing's changed.

Roosevelt also vilified the wealthy and blamed the Depression on them, using the type of demagogic language one might hear from moveon.org or Air America. "The Depression, FDR said, was the result of 'lack of honor of men in high places' and 'crooks.' More generally he assigned blame to a moral fault: national greed." Jimmy Carter, anyone?

Shlaes explains that the "annihilating event" that kept the depression going was deflation, and that FDR repeatedly acted in such a way as to make the deflation worse -- by contracting the money supply, by raising taxes, and by engaging in an economic jihad against those with capital to invest in the economy. Plus, by acting in such an arbitrary, dictatorial, and essentially lawless manner, investment capital naturally flowed away from the economy, since investors always want predictability. Why invest today if you have no idea what new radical experiment FDR is going to try tomorrow, say, raising corporate taxes to 90%? Many investors hoped to simply "wait out" Roosevelt until a more favorable business climate existed.

Roosevelt fundamentally distrusted the stock market and underestimated the ability of the economy to right itself, in the manner of every leftist since: he "cared little for constitutional niceties and believed they blocked progress. His remedies were on a greater scale and often inspired by socialist or fascist models abroad." He believed that recovery "could be achieved only through a large, military-style effort." Many factors contributed to the Depression, but "the deepest problem was the intervention, the lack of faith in the marketplace." Remarkably, his favorable view of the Soviet Union was validated "nearly daily in the New York Times by the paper's Walter Duranty." The more things change...

Massive new institutions such as the National Recovery Administration "frightened away capital, and they discouraged employers from hiring workers." The laws he signed were so broad that no one knew how he would interpret them. Ironically, for someone who said "the only thing we have to fear is fear itself," his "commitment to experimentation itself created fear" -- "not merely the new policies that were implemented but also the threat of additional, unknown, policies. Fear froze the economy..."

Again, one of Roosevelt's most profound changes had to do with the redefinition of liberalism: "Before the 1930s, the word 'liberal' stood for individual; afterward, the phrase increasingly stood for groups."

Leftism will always be with us, because it is not so much an ideology as a sort of pathological seed planted in the heart of man. In my opinion, it truly is a genetic condition, as it is a reflection of the primitive economic system that prevailed in the archaic environment in which man's genome was selected. That primitive zero-sum worldview is based upon group solidarity, scarcity, stasis, and envy, whereas the non-genetic ideals of classical liberalism are based upon enlightened self-interest, economic progress, unlimited wealth, and ignoring the primitive envy of our most childish citizens, since it can never be appeased anyway.

60 Comments:

Blogger Van said...

Sorry to but in, but this one's a biggee..., unless you want the FCC in a position of being able to decide whether to allocate bandwidth to Deepak or One Cosmos, Daily Kos or Gateway Pundit, Raise a frick'n Ruckus over this!!!

9/22/2009 08:34:00 AM  
Blogger Van said...

"As Mises writes, "None of the great modern inventions would have been put to use if the mentality of the pre-capitalistic era had not been thoroughly
demolished by the economists. What is commonly called the 'industrial revolution' was an offspring of the ideological revolution brought about by the
doctrines of the economists. The economists exploded the old tenets" that held development in check and were profoundly anti-progressive."

Exactly the case. Modern leftist proregressivism is nothing but an attempt to roll back Liberalism, to return to the age where Kings ruled by divine right, and appointed ministers and granted stipends and 'awareness' to the elites... the only difference is that leftists want to decree who shall be king. By mixing needs and rights into a confused slop, they dilute and destroy Rights, and roll back liberty and Liberalism.

But Freedom is already Free (though it's price is not), it cannot be 'enhanced' or 'improved'.

As Coolidge pointed out,
" If all men are created equal, that is final. If they are endowed with inalienable rights, that is final. If governments derive their just powers from the consent of the governed, that is final. No advance, no progress can be made beyond these propositions. If anyone wishes to deny their truth or their soundness, the only direction in which he can proceed historically is not forward, but backward toward the time when there was no equality, no rights of the individual, no rule of the people. Those who wish to proceed in that direction cannot lay claim to progress. They are reactionary. Their ideas are not more modern, but more ancient, than those of the Revolutionary fathers. "

The price of Freedom is understanding it's meaning and requirements... without that, no legislation will tack it up in place and preserve it. If not held in truth in the people’s hearts and minds (It's not enough to write the "...laws into their hearts, and in their minds will I write them", we must also read them, remember them, stand up for them), nothing will keep it from crumbling away.

The freedom and liberty we've lost, we've lost through the schools, it will only be through reclaiming education, that we will regain it.

9/22/2009 09:50:00 AM  
Blogger Ricky Raccoon said...

Bob said,

“Why invest today if you have no idea what new radical experiment Obama is going to try tomorrow, say, raising corporate taxes to 90%? Many investors hoped to simply "wait out" Obama until a more favorable business climate existed.”

Oh, no, wait..
Oh.
Yes you did.

9/22/2009 10:27:00 AM  
Blogger Ricky Raccoon said...

Different day, er.. night, same legacy:
"I'm an idea man, Chuck."

9/22/2009 10:33:00 AM  
Blogger julie said...

...the only difference is that leftists want to decree who shall be king.

Hm. I can't help thinking of the Kennedys. I don't even know that it was the leftists so much that decreed they should be American royalty, as that Americans (in general) themselves fell in love with the idea and acted accordingly. Granted, there was a lot of media assistance. But it kind of goes hand-in-hand with Bob's last paragraph, I think. Democracy and liberty simply do not come naturally to most humans, even to many Americans, especially since the truth of American exceptionalism is no longer taught in our schools. Let's face it - most forms of leftism are simply tyranny in disguise, making the plight of the average man equally wretched while having an established ruling class call the shots, slavery in exchange for stability. True freedom is a frightening thing, after all, and if when you cast your vote the name's the same and you know what to expect, one generation to the next, well... look at Massachusetts. Did people really think Teddy was that great, or was it just easier to stick with the status quo than to go with an unpredictable unknown?

Or maybe I'm just rambling again.

9/22/2009 11:06:00 AM  
Blogger Van said...

"Shlaes explains that the "annihilating event" that kept the depression going was deflation, and that FDR repeatedly acted in such a way as to make the deflation worse -- by contracting the money supply, by raising taxes, and by engaging in an economic jihad against those with capital to invest in the economy. Plus, by acting in such an arbitrary, dictatorial, and essentially lawless manner, investment capital naturally flowed away from the economy, since investors always want predictability."

Whenever you hear a person, especially a politician, say that we must 'be pragmatic'... this is what you should think of. That is, was, and always be pragmatism in action - action for actions sake, movement for movements sake, direction unknown and considered unimportant.

'Compass?! True North?! We've no need of principles, only action and speed!'

The result is the same, whether a ship of state, or an actual ship, it's a shipwreck that's being 'steered' towards.

9/22/2009 11:10:00 AM  
Blogger Van said...

Julie said “I don't even know that it was the leftists so much that decreed they should be American royalty, as that Americans (in general) themselves fell in love with the idea and acted accordingly.”

This goes to the heart of it,
“He believed that recovery "could be achieved only through a large, military-style effort."”

Proregressives, from the very beginning, and the first implementation via Bismarck, they want uniformity, they want to give orders, and they want the ‘rank and file’ forced to comply.

9/22/2009 11:14:00 AM  
Blogger Van said...

Ironic as it is today, with the lefts apparent dislike of the millitary, that is their model... and they are very aware that the 'rank and file' is not free to refuse or do otherwise.

They very much like that.

9/22/2009 11:17:00 AM  
Blogger julie said...

Roger Simon via the Anchoress,

I was struck by two things. One was the aroma of self-intoxication. These bureaucrats and artists and activists are utterly besotted by the contemplation of their own virtue. They know what’s good for the country, and what’s good for you, and they’re willing to devote themselves ceaselessly to making it happen.

The second thing that strikes one about this transcript is the aura of menace that floats just behind the talk of passion, pushing the president’s agenda, connecting with “labor unions, progressive groups,” etc., etc. As Yosi Sergant’s pep talk suggests, these people regard legal obstacles not as boundaries to be observed but as impediments to be overcome by “tactics,” a word that frequently appears in the transcript.


Yep, that backs up your point pretty well, Van.

9/22/2009 11:29:00 AM  
Blogger Gagdad Bob said...

It's like a freakin' blast furnace outside. Brushfire comin' through in 5-4-3-2.....

9/22/2009 11:42:00 AM  
Blogger robinstarfish said...

Leftism will always be with us, because it is not so much an ideology as a sort of pathological seed planted in the heart of man. In my opinion, it truly is a genetic condition, as it is a reflection of the primitive economic system that prevailed in the archaic environment in which man's genome was selected.

Orange Crush.

9/22/2009 11:44:00 AM  
Blogger katzxy said...

For years growing up and into young adulthood, I could never understand those around me who supported expansion of government. These seemed to be smart people, decent people. Yet with almost no exception they supported the leftism of the time.

And that was one of the longest running puzzles of my life.

9/22/2009 01:45:00 PM  
Blogger katzxy said...

Van -

That's a great quote from Coolidge.

9/22/2009 01:48:00 PM  
Blogger jp said...

Bob, you said:

"A couple of posts originally undertaken two years ago that I've dug up and reexhumined in light of my current burial in the neo-classical economics of Mises and Hayek. The posts have been condensed, revised, extended, and embalmed."

As this is an area of some interest to me, I have found that there seems to be a problem with neoclassical economics. Namely, that it seems to view things as stasis in some fashion. I haven't really though about this, though.

Steve Keen is one economist who is working on the fact that the current economic models are failures. His big hang up is the significant problem of debt.

As usual, I've forgotten how to create a link on Blogger.

www.debtdeflation.com/blogs/

9/22/2009 02:06:00 PM  
Blogger Gagdad Bob said...

As far as I can tell, it's the opposite. Mises emphasizes over and over that a free market is intrinsically dynamic and unstable, and that it is foolish to even try to abstract one part of it without reference to the irreducibly complex whole. Each moment of the market is just a snapshot of a past that is already gone by the time we look at it.

9/22/2009 02:17:00 PM  
Blogger Gagdad Bob said...

Mises: "The mathematical economists are almost exclusively intent upon the study of what they call economic equilibrium and the static state.... But it is a grave mistake to consider this auxiliary tool as anything else than an imaginary construction, and to overlook the fact that it has no counterpart in reality."

In a way, it very much parallels the abstract models of the global warming hysterics, who have no idea of the number of variables responsible for climate change, nor how they interact.

9/22/2009 02:53:00 PM  
Blogger Gagdad Bob said...

Besides, I just wanted to write a sentence with undertake, dug up, exhume, burial, and embalmed.

9/22/2009 03:00:00 PM  
Blogger Gagdad Bob said...

Those little inside jokes between me and myself keep me going....

9/22/2009 03:03:00 PM  
Blogger Anna said...

jp said...

"Namely, that it seems to view things as stasis in some fashion."

I was reading about this very topic this morning, and the problem was when profit itself becomes a constant - a static fact of profit. The text was a little unclear and I didn't have an opportunity yet to further for context so I had a feeling I was misunderstanding the point. Would that be a misinterpretation of the classic economists theories? For example, when companies aim for profit every quarter rather that thinking in the long term since profit ebbs and flows even as it rises in the longer term.

Big topic, little comment. A loose sketch of a notion. And I might be missing a few slices of salami in this sandwich.

9/22/2009 03:03:00 PM  
Blogger Anna said...

Horrid typos. Hopefully half-readable. At work....

9/22/2009 03:05:00 PM  
Blogger Anna said...

I was thinking that (wondering if) constant profit was a misinterpretation of classical economics in other words.

9/22/2009 03:12:00 PM  
Blogger julie said...

In a way, it very much parallels the abstract models of the global warming hysterics, who have no idea of the number of variables responsible for climate change, nor how they interact.

I was thinking that, earlier. Image the sheer, stupefying, life-ending chaos if the government ever does manage to control some significant portion of the weather.

Another case in point, Shrinkwrapped has a post up today about the Methusalarity, wherein he notes that scientists are beginning to understand the sheer complexity of DNA. But like the weather and the economy, I wonder if enough will be understood before they start trying to tinker with mechanisms and systems they haven't fully grasped. Maybe I'm being too cautious, though. For some reason, I just don't place a lot of faith in the infallibility of computer models in the hands of well-meaning scientists.

9/22/2009 03:20:00 PM  
Blogger julie said...

Anna,
I don't know much about classical economics, but I do know that anyone who believes there will always be nothing but profits is a fool. The problem, again, is the human factor. There are things that could be done right now that would spur the economy back to growth mode, but even then eventually someone would come along with a little scheme, or people would go crazy over the next big fad (think tulips). There will always be bubbles and bursting, so long as the market is dependent on everything from the vagaries of human nature to the unpredictability of the weather. But they'd be a lot less catastrophic in the long run if the gov would just stay out of the way and let the market work.

9/22/2009 03:28:00 PM  
Blogger Anna said...

Julie,

Yes, I agree - to make an absolute of profit every moment is a major error. It was more of a question of whether people misinterpreted classical economics as saying profit is a constant, thereby having a static element in an otherwise completely dynamic system.. I might have been wrong to think they thought that of them (those interpreters of cl. econ.) It was something referred to in detail in a book with an older, thick style of writing that is hard to decipher at times.

9/22/2009 03:42:00 PM  
Blogger julie said...

Oh. In that case, I'm useless :)

9/22/2009 03:46:00 PM  
Blogger Ricky Raccoon said...

From the desk of Obie

Dear Julie and Anna,
If you can get that profit down to zero and never, I think we’ve got ourselves a deal.
Love,
Obie

9/22/2009 03:49:00 PM  
Blogger Anna said...

RR -

Ahoy! (I think.)

...I'm newish to this stuff, so new that I don't yet know if I'm 'new to very new' rather than just newish. But yes the eventual zero-profit factor did come up. I'm at the beginning of said book and it will all become clearer as it progresses.

9/22/2009 03:57:00 PM  
Blogger Anna said...

I don't think the zero-profit eventuality is true, btw. But I'm a pip squeak on this so should keep my squeaking to a minumum.

9/22/2009 03:59:00 PM  
Blogger Ricky Raccoon said...

OT:

Haven't seen Will around in awhile. Anybody heard from him?


Could be slightly related some time in the future, I see the ability to post as anon is off.. was that on purpose, Bob?

9/22/2009 04:01:00 PM  
Blogger julie said...

Good observation, Ricky - that explains the lack of trolls today...

9/22/2009 04:09:00 PM  
Blogger Ricky Raccoon said...

No worries, Anna. You and Julie have it right.
King Obie however sez, all you profits are belong to us.

9/22/2009 04:10:00 PM  
Blogger Anna said...

"I don't think the zero-profit eventuality is true, btw."

Or is it? See? I don't know much about that stuff yet (historically/specifically speaking); on this at the moment I'm a pip squeakette. It is very rivetting though and who would think I'd spend the Friday night before last going line by line with a pencil underlining through an economics book?!!

9/22/2009 04:11:00 PM  
Blogger Ricky Raccoon said...

You’ll never get to be Economy Czar with that attitude!


:-)

9/22/2009 04:14:00 PM  
Blogger Anna said...

RR -

Oh I see! Yes. Obie... I was almost thinking OB1 for a minute. Yeah, *that* guy. Zero-prof's the better, yes. I tend to forget about him sometimes. Not to be rude or anything, I just do!

9/22/2009 04:14:00 PM  
Blogger Anna said...

I can't believe there are czars here. Is that normal? Have there been other czars? Why the name? Supposed to be tongue-in-cheek I think, but... odd.


wv: costskin

Somehow it seems to relate. Obie costs (your) kin?

9/22/2009 04:20:00 PM  
Blogger Anna said...

A quick Google search yielded this random blog entry:

The Bizarre Title of Czar in U.S. Politics

http://southdakotapolitics.blogs.com/south_dakota_politics/2009/01/the-bizarre-tit.html

9/22/2009 04:25:00 PM  
Blogger Gagdad Bob said...

Will is just dealing with a non-life threatening health challenge. You know... manopause.

Buy where's Walt-o?

And yes, I switched over to registered users only, until the trolls lose interest. I don't mind their comments, since they are always self-refuting anyway. I just don't like how they inevitably highjack the thread and clog it with irrelevant material.

9/22/2009 04:31:00 PM  
Blogger julie said...

Not to mention the whining and demands to be entertained all the time.

I think Robin may have a clue about Walt. The impression I had is that he's decided to step away from the computer for an extended period. Hopefully only for hermitish reasons.

That's been a pattern this summer - lots of people scattering, a few new faces joining in.

Haven't heard from JWM in a while, either.

9/22/2009 04:39:00 PM  
Blogger walt said...

"...where's Walt-o?"

Oh, Walt is layin' low, and sayin' as little as possible. Active on the insides, however.

9/22/2009 04:46:00 PM  
Blogger Ricky Raccoon said...

Thanks, Bob.
I miss Will's comments.

Yeah, and Walt *poof* and JWM.. hope they're ok.

(sorry if I hijack threads)

Were you serious about the brushfire?

9/22/2009 04:46:00 PM  
Blogger Ricky Raccoon said...

Whoa!

wv: undef (you said it!)

9/22/2009 04:47:00 PM  
Blogger Gagdad Bob said...

Brushfires -- yes, they pass through here every two or three years, when the hot Santa Anas blow in late September and October. It's been since October 2005, so we're due. It's always a sort of perverse thrill, because it's more of a grass fire, so it goes by very quickly. A little further south toward Malibu the brush gets thicker, so those folks have more to worry about....

9/22/2009 04:52:00 PM  
Blogger Ricky Raccoon said...

Sounds like how I sort of like it when we have hurricanes here. Everyone stops what they’re doing. Usually the storms pass at night. Like a snow storm. And in the morning everything is upside down. Yet you slept through it.

9/22/2009 04:56:00 PM  
Blogger Gagdad Bob said...

I mean, when you see those flames after dark shooting up 60 feet in the air from a hundred yards away, it is a kind of quasi-religious feeling.... That happens when they hit an oak tree. Fortunately, it just burns off the leaves & dead branches, but rarely kills the tree if it isn't already unhealthy....

9/22/2009 04:59:00 PM  
Blogger Ricky Raccoon said...

Quasi-religious is a good way to put it.

9/22/2009 05:18:00 PM  
Blogger Ricky Raccoon said...

Have you seen this one at the MZ, Bob?

9/22/2009 05:20:00 PM  
Blogger julie said...

Walt - active on the insides is the most important place, imho. Glad you're still lurking about :)

9/22/2009 07:12:00 PM  
Blogger mushroom said...

Oddly enough, what Bob says perfectly reflects what I heard all my life from my self-educated, independent, individualist father who survived FDR and the New Deal.

Free market policies always work if they are allowed to. What has happened in the last cycles is that government had intervened to ease the bursting of the bubble by financing a new bubble. Housing and RE mortgage derivatives fueled the last one, which was created as the dotcom's cratered -- exacerbated by 9/11.

The Austrian School believes, and I agree, that such cycles are necessary and beneficial in the long run. Things readjust. Productivity catches up with value, the debt load gets regulated, and life goes on.

When you have government stepping in to "soften" the blow, you keep pushing the inevitable ahead. The debt load keeps building until you have a major catastrophe. We now have a government bubble building. When this one breaks, welcome to Zimbabwe.

Spooky wv says, Don't cryove-r spilled stock options.

9/22/2009 08:02:00 PM  
Blogger mushroom said...

TNR -- weren't those the guys publishing the fake soldier stories a couple of years back? But a good ideolouge never lets facts stand in the way.

Personally, I've always preferred the Stratolouge over the Ideolouge. But I do think nothing beats a good ideoluge on ice.

9/22/2009 08:11:00 PM  
Blogger Gagdad Bob said...

Mushroom:

Exactly: Liberals just help the short term interests of the few at the cost of harming the long term interests of the many.

9/22/2009 08:14:00 PM  
Blogger Gagdad Bob said...

"I am become government, destroyer of worlds."

9/22/2009 08:45:00 PM  
Anonymous goddinpotty said...

Censorship of jobless homosexuals! Mother's going to hear about this.

9/22/2009 09:42:00 PM  
Anonymous goddinpotty said...

Since when does one have to be gainfully employed to be an obsessive cyberstalker?

9/22/2009 09:45:00 PM  
Anonymous Cousin Dupree said...

Goddinpotty, whatever happened to that restaurant gig?

9/22/2009 09:59:00 PM  
Anonymous godinpotty's Mom said...

STFU you freak!

9/22/2009 10:29:00 PM  
Blogger Van said...

Anna said "Would that be a misinterpretation of the classic economists theories? For example, when companies aim for profit every quarter rather that thinking in the long term since profit ebbs and flows even as it rises in the longer term."

I think in general putting your primary concern on effects, rather than on what produces them, is an error, and yes, that misapplies the better ideas in classical economics.

Personally, I think the economists, classical or modern, belief that they can, account for all costs, loses, profits, predict, control or even guide an economy ... is a fools quest... sort of like the physicists 'grand unified theory' that will enable full explanation and predictability of all events... it ain't gonna happen. Working with inadequate information and deriving grand rules from them, usually result as Aristotle's Physics did with "Impetus"... something that seemed likely, but had little or no basis in reality. Now of course continually seeking new knowledge, discovering and understanding principles, is a good thing... thinking you've found them all, or making claims as if you do, not so good. You see this particularly where they begin to treat Money as some almost mystical, generative value itself, rather than a medium, marker or measurer of value.

Economists are, and were, at their best when observing and deriving fundamental principles. Jean Baptiste Say was one of the best, and the first to identify and integrate the principles behind supply and demand, usually referred to as Say's Law, and IMHO, are THE most important principles in economics.

Here's a summary 'Say's Law' (I only skimmed the link, but looks decent - and a decent summary of Say is hard to find (the Rothbard mentions get me nervous, but looks like it keeps him to economics), it also mentions Thomas Sowell's book on Say). This paragraph in particular, pointing out the misinterpretation of Say by Keynes, caught my eye as being a useful one,

"In the first section of Chapter 3 of his GENERAL THEORY, Keynes states Say's Law to be "supply creates its own demand" and he interprets Say's Law to mean "that the aggregate demand price of output as a whole is equal to its aggregate supply price for all volumes of output". Both Keynes' statement and interpretation are erroneous. Say's Law states that a produced good represents demand for other goods, not for itself (as "its own" could imply). Say's Law does not equate supply & demand (Keynes' belief that Say's Law means that everything that is produced is sold), but makes supply a precondition for demand. Supply equals demand at the clearing price on a supply-demand curve (for particular goods and aggregates), but Keynes was wrong to equate supply/demand curves with Say's Law. Supply constitutes demand, but demand does not constitute supply — one cannot have the means to buy without first having something to sell. Supply of a good can constitute demand for other goods. "

(friggn' anti-longwinded blogger)

9/23/2009 06:23:00 AM  
Blogger Van said...

You've also gotta be careful what "Classical Economics" refers to, because it usually includes people with deeply flawed or bad ideas ranging from Malthus to someone like J.S. Mill (the internal corrupter of Classical Liberalism and Classical Economics), and they'll often restate and horizontalize what Say said into meanings Say hadn't meant, which later people like Keynes did their best to take them nearly out of existence.

Say believed that Reason (and of course Free Will), will lead people to produce products, and the varied actions involved in production we see as supply and demand, and are regulated through market pricing - it is a very, deeply integrated view of an economy. Keynes and his ilk, believe in a behaviorist view of 'market forces' and other planned pin ball effects nudging and directing an economy by demand, from the top down, with central govt planning as being the most 'efficient' motive force in an economy. Our current situation is an excellent example of how that top down 'enforced stupidity' works out in practice.

True classical economics believes in the dynamic actions of individuals to produce goods and respond in a growing, integrated, and never fully predictable form, which, as Adam Smith said, gives the appearance of "an invisible hand" seemingly guiding the market to expanding, self regulating, and increasing wealth via supply and demand.

Yikes, I should probably look back over this... but gotta run, hope it's not too disjointed....

9/23/2009 06:24:00 AM  
Blogger Anna said...

I'm glad I didn't have coffee in my mouth when I read the disclaimer beneath "Leave your comment".

Er hemm... anyway,

Van,

Yes the author of the book I am reading (Capitalism, Socialism and Democracy by Joseph Schumpeter) also pointed that out about who is referred to as a classical economist. The book caught my attention on the shelf at a bookstore - marked down to something like $7.

He was describing opposition to capitalism and yeah the first impulse of a mistake in that opposition was to look at it from the birds eye "total" perspective. By doing that they usurped the main ingredient of capitalism's mystery sauce - the unknown or the open circle/open-ended factor, in the future.

The point about effects that you made completely makes the point. Bingo!

Keynes said:

"supply creates its own demand"

Whatever! I don't think so!

Thank you for the links. They will be very useful. My haunting fear, since I first always read with trepidation, was that a secular view of capitalism as merely a profit-machine (effects) would entirely miss the point and foreclose it. Sometimes popular media seems to focus on it that way, I've noticed, like when dealing with China and India, as an argument for globalization - like, "Nations aren't necessary - only the competitive free market", putting the profit cart ahead of the horse. Now I've reached Tangential Point Threshold.

9/23/2009 10:32:00 AM  
Blogger Van said...

Anna said "My haunting fear, since I first always read with trepidation, was that a secular view of capitalism as merely a profit-machine (effects) would entirely miss the point and foreclose it."

Yep, don't forget that our system was called "Liberalism", "Free Markets" and so forth, the term "Capitalism" came from it's enemy, Marx.

'Capitalism' is about, assumes, and is absolutely dependent upon Individual Rights, Objective Law - free people with a secure right to their property, and a Govt which defends them instead of plunders them.

Marx, and the Proregressives are it's enemy for Precisely. That. Reason.

9/23/2009 04:43:00 PM  
Blogger Anna said...

Aha! I knew something was amiss! First of all "ism"... Second of all, Marx's obsession with the idea of "capital". Kind of like when I first read Keynes (in a semi-neutral forum so was somewhat permeable to the writing) and thought I smelled something afoul. Then later heard free market refutations of Keynes and my suspicions were confirmed. Read--control. That the term "capitalism" wasn't always the word used to describe the free market says a lot. I'm going to think that over. Often when discussing this with friends, they use the word capitalism and when I say free market they define free as lawless. Twisted. I'm starting to also sense that modern day liberals define liberal as "do whatever you want" and someone (else) will pay for it. Civil liberties sounds more like civil license - so that the bad consequences from poor choices (those that violate spiritual law) won't see the economic ramifications of those choices. Since often those choices can have a practical effect. [Phew! I didn't mean to write on like that...]

9/23/2009 05:39:00 PM  

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