The New Terrapin Gazette
11 December, 2011
. ..we repudiate only forced organization, not natural organization. We repudiate the forms of association that are forced upon us, not free association. We repudiate forced fraternity, not true fraternity. We repudiate the artificial unity that does nothing more than deprive persons of individual responsibility. We do not repudiate the natural unity of mankind under Providence.
The Holy Gospel Of Twentieth Century Economics, The Epistle of Saint John To The Patricians, Is Neither Heaven-Sent Nor Inerrant
The British economist John Maynard Keynes (pronounced “canes”) taught that when high levels of unemployment and a severe decline in prosperity occur, the government should create more money and put it into circulation. As this newsletter pointed out recently, that policy is a confusion of money with wealth, and it ignores the fact that unless productivity rises, prosperity will not rise. Keynes assumed that if the supply of money increases, productivity will naturally rise. He was guessing hopefully. The Obama administration — which is probably the most economically ignorant and dogmatically ideological regime in US history — is solidly Keynesian.
It bears repeating: economics is a study, not a science. Politicians can not mandate prosperity, and few folks have grasped the point that when government tries to impose its will on hugely complex markets, things are more likely to go off the rails than they are to have the desired effects. After more than five years of the New Deal, the Great Depression was worse than ever.
The realization is growing that Keynes’s doctrine was too simple. More people see today that its adoption would devastate the middle class, savage the investors who fuel business, and increase animosity between social strata. Even the profoundly socialist London School of Economics is beginning to appreciate the fact that the rejection of astronomical levels of borrowing and an intolerance of ruinous inflation are necessary. That is not to say that Team Obama and the meddlesome folks at The Federal Reserve are clear on the concepts, of course.
What, one might well ask, is wrong with Keynesian cant? An economist notes four failings: first, people realize that borrowed money must be paid back, and that funding the payments will often come from higher taxes. That prompts investors to hang on to their money; they need incentives to take risks, and high levels of debt and taxation are disincentives. Second, money spent on unemployment benefits is not available to fund increases in productivity, so higher levels of prosperity are postponed. Third, Keynes never addressed the effects of bureaucratic regulations promulgated by the federal government. Unions are sheltered at great cost, environmental rules appear in spite of their irrationality or draconian impact, and corporations must guess what taxes and rules will be imposed on them. Growth is hindered by ignorance of what the future will demand of business. Finally, it has been estimated that the creation of a single job by the Obama administration costs two hundred thousand dollars. The goal is quick results, while the money those results cost must be paid back over the long term. That’s the triumph of political posturing over common sense.
Free markets, prudent borrowing and spending, predictable costs of doing business, honest governance and free trade always maximize prosperity. Keynes taught that these stable bases for commerce and industry could be ignored. He was wrong, and the nation will be paying the cost of his error for many years.
The Nobel Prize In Economic Sciences, Two Laureates, And Two Newspapers
Thomas Sargent and Christopher Sims won the Nobel for 2011. The news was reported by The Wall Street Journal and The Los Angeles Times. The WSJ carried a report by David R. Henderson titled, “A Nobel for Non-Keynesians”. In it, the author repeatedly pointed out that the laureates provided evidence that Keynes’s work is “fallible”. The California paper published a news item that did not use Keynes’s name even once, and never implied that the laureates had cast any doubt on his doctrine. It also did not mention that Sargent is the author of an article titled, “Is Keynesian Economics a Dead End?”
According to the Obamedia, some news is better not reported, lest the readers get the wrong impression.
A Dearth Of Leaders
Collectivists are beginning to realize that Obama lacks the qualities of a true leader. Some say he does not enjoy his job; some complain that his commands lack authority, or that he cannot intimidate others into compromising. The Republicans, meanwhile, are trying to choose a winner from a group of volunteers who are either badly flawed, unimpressive, or amazingly capable of blundering every time they say or do something. Obama, unpopular though he is, could certainly be re-elected…simply because the GOP can’t field a mediocre candidate.
How much better for the nation if the failure of its leadership had come at a far less stressful time. The enemies of Western Civilization, emboldened by the USA’s difficulties, may perceive no better time to strike.
Of course the victims of bad times are also presented with opportunities. The errors of the past and present could be set aside. Lessons could be learned. The policies of the future could be formulated to prevent a Peronist government from pandering to drones. It is possible that the USA will emerge from this dismal period confident that it will never again make the mistake of allowing charlatans to become politically powerful.
It could happen. But…who, precisely, will be able to convince the electorate to replace Utopian fantasies with good sense? The task demands a person of conscience, integrity and intellect; those strengths must then be combined with a sense of perspective informed by experience and wisdom. Finally, there must be an iron resolve in the nation’s leader, an inspiring determination that can be communicated to the populace. Is there today someone yet unrecognized who might qualify?
Why Call The President And His Team “Peronist”, Anyway?
Christina Kirchner is the president of Argentina. Her policies are inspired by/copied from the authoritarian regime of Juan Peron, the mountebank who bequeathed his nation a legacy of abiding misery. Shortly after The One assumed the presidency of the USA, Kirchner said, “I don’t know if (sic) Obama has read Peron, but let me tell you, it sure seems like it.”
Peronism refers to a style of dictatorship that stifles free markets, cynically promotes a travesty it calls “social justice”, practices energetic crony capitalism, enriches lickspittle unions even as it promotes corporatism, prevents the nation from developing a competitive economy, erodes Liberty and hammers voters with slogans (like “Hope and Change!”) and crass showmanship (like badly-faked Greco-Roman sets for political ceremonies). Peronist regimes tend to concentrate wealth in the hands of an elite political class and reduce the nation’s standard of living. Yet they rely on the support of an underclass whose poverty makes them pathetically dependent on the endless promises and trifling subsidies provided by the authorities. As long as the nation can be held in thrall to the myth of an impending Utopia, Peronism can survive. (For a “progressive” view of Juan Peron, see this paean posted, as one might imagine, on the Columbia University website. Old-fashioned socialists may denounce Peronism as “labor fakery” because they recognize the crony capitalism as a fascist scam that has no genuine concern for the poor.)
Kirchner approvingly noted a significant emphasis Obama has given his administration: “The other day I heard the president of the most powerful country on earth say that, in technical and financial terms, the unions are not part of the problem, but rather, part of the solution, and that he wants large prosperous unions together with large, prosperous businesses.”
To “progressives”, those words are a call for solidarity in the political struggle for economic security. To those who value Liberty, they are a warning. Perhaps the best way to decide which attitude is best would be to survey the results of Peronism in Argentina, and study the consequences of governmental intervention in the economy of the USA.
The stellar recommendation in this issue of The New Terrapin: consummate rationality addresses social dis-ease. Don’t skip it.
From the How do you pronounce “agent provocateur“? file: Everyone knew Newt would inspire some passionate opposition. No one could have predicted Glenn Beck’s critique, however. Beginning with the insane assertion that Newt is just as “progressive” as Obama, Beck moves on to accuse the Tea Party Movement of racism. The moron is roadkill.
The Justice Department’s lack of ethics may alienate a lot of centrist voters in the next presidential election. Yes, it’s Holder and the “Fast and Furious” fiasco again. Note, by the way, that Sen. Feinstein knows neither the law nor the facts…or she is simply lying when she babbles about firearms sales in the USA. Even CBS is joining in the fracas now, so things are heating up; in July of this year, this prophetic speculation surfaced. Here’s a recent closer look at the the probabilities. So what’s the proper thing to do? This.
If you are feeling cheerful and optimistic these days, this commentary should fix that. Sorry….
Conservatives who support Gingrich for president will resonate to this explanation of why Newt is the “wingnut’s” choice.
More “wingnut” fodder: Obama’s lying again, and he gets called on it. All right, but the commentary says, “Budget data make clear that Obama’s spending hikes, not Bush’s tax cuts, produced today’s massive deficits.” True, but by no means the full story; G. W. Bush’s spending was irresponsibly profligate, and that was the original problem that Obama/Pelosi/Reid et. al. made so much worse. Sure, The One is fast and slippery with the facts, and especially so when he’s ranting about what he calls “fairness.” That’s not an excuse for implying inaccurately that W’s administration is blameless.
This Quixotic, irrational, stunningly stupid proposal might not be a practical joke played on the world’s media. After all, Rosie O’Donnell exists, so it’s possible that the universe suffers from other gross deformities.
Look into this 1935 court case. It provides important perspective on the coming battle over Obamacare.
The masthead includes a quote from the works of Frederic Bastiat
The staff of The New Terrapin Gazette expresses its sincere gratitude to the many people who have gifted the world with Arch Linux, Emacs, and Chromium.
Publisher: The Eagle Wing Palace of The Queen Chinee