Sunday, July 24, 2011 - 18:52
Jeffrey Rogers Hummel
Over at the Forbes blog, Timothy Lee of the Cato Institute has a good post criticizing what he calls "libertarian inflation hawks." But as David Henderson points out in an EconLog post entitled "Timothy Lee's Blunder," Lee is quite incorrect to state that Scott Sumner is the "lonely exception" to libertarians predicting rising inflation. As evidence, David cites our own joint article defending Greenspan, published by the Cato Institute, along with two of his previous posts. He also could have mentioned our earlier defense of Greenspan, appearing in the March 28, 2008, issue of Investor's Business Daily.
Even if Lee has in mind only libertarian inflation predictions since Bernanke's response to the financial crisis, he still has overlooked an article I wrote for the November 2010 issue of The Freeman, entitled "Government's Diminishing Benefits from Inflation," in which I make almost the same point as Lee: "most libertarians . . . anachronistically harp on how the U.S. or European governments might cover significant fiscal shortfalls with the printing press, completely...
Saturday, July 23, 2011 - 16:33
Jeffrey Rogers Hummel
The New York Review of Books has run an outstanding, two-part review by Marcia Angell of three new books highly critical of psychiatric drugs and medical psychiatry: (1) Irving Kirsch, The Emperor's New Drugs: Exploding the Antidepressant Myth; (2) Robert Whitaker, Anatomy of an Epidemic: Magic Bullets, Psychiatric Drugs, and the Astonishing Rise of Mental Illness in America; and (3) Daniel Carlat, Unhinged: The Trouble with Psychiatry--A Doctor's Revelations about a Profession in Crisis. The first part of the review, entitled "The Epidemic of Mental Illness: Why?", ran in the June 23, 2011, issue. The second part, entitled "The Illusions of Psychiatry," ran in the July 14 issue. The review's shocking empirical revelations lead to conclusions quite consistent with the views of Thomas Szasz, who is even briefly mentioned in the second installment, although neither the reviewer nor any of the authors necessarily share Szasz's blanket theoretical rejection of all medical psychiatry.
The pharmaceutical industry is also implicated in the critiques. As most of you know, I am an opponent of nearly all intellectual property. Medical drugs admittedly are the hardest case for those who want to do away with patents. While I believe that abolishing the FDA would address many...
Friday, July 22, 2011 - 10:00
My take on the morality of paying government bondholders is here.
Thursday, July 21, 2011 - 13:27
Jeffrey Rogers Hummel
One of my former students asked me about Pete Boettke's post over at Coordination Problem on a recent Paul Krugman presentation, "Mr. Keynes and the Moderns." Pete does not agree with Krugman, but he likes this particular piece and thinks it must be addressed. Perhaps I'm missing something, but I'm not entirely clear why.
Although I agree with Pete both (a) that it represents Krugman at his least intellectually dishonest and (b) that it makes a useful history-of-thought distinction between Keynesians who focus on Part 1 of The General Theory (Hicks and Samuelson) and those who focus on chapter 12 (essentially post-Keynesians and Leijonhufvud), most of the article merely reiterates the traditional textbook (IS-LM) exposition. There is almost nothing original there, not even with respect to providing an intuitive understanding of Keynesian theory. On the contrary, Krugman displays no explicit appreciation of the fact that a Keynesian divergence between total spending and total income can arise only through a change in the demand for...
Tuesday, July 19, 2011 - 14:34
Jeffrey Rogers Hummel
The latest issue (Summer 2011) of The Independent Review has a wonderful review essay by George Selgin critical of Nouriel Roubini and Stephen Mihm's Crisis Economics: A Crash Course in the Future of Finance. Roubini is of course the famous "Dr. Doom" who in September 2006 predicted the recent financial crisis.
But as Selgin points out, if "one devoted Roubini watcher is to be believed, 'Dr. Doom' actually predicted no fewer than '48 of the last 4 recessions.' . . . Roubini predicted a serious crash for 2004, then a severe slowdown for 2005, then a global reckoning for 2006, and finally a sharp recession for 2007. After the much-trumpeted crisis at last materialized (though not quite for the reasons Roubini had harped on), he declared that the S&P 500 would sink to 600, that oil would get stuck below $40 a barrel, and that a gold 'bubble' was about to do what the housing one had done. To be sure, these things have not yet come to pass, but tomorrow is another day, and to succeed prophets need only mark when they hit and never mark when they miss."
Although Selgin's review is not entirely negative and there are sections I would take issue with, it scores many important points.
NOTE: Selgin got the quotation about Dr. Doom predicting "48 out of the last 4 recessions" from a comment on the blog Seeking Alpha, but as many may recognize, this is quite a common economic quip first used, I believe, by Paul Samuelson in 1966: "Wall Street indexes predicted nine out of the last five recessions! And its mistakes were beauties."
Monday, July 18, 2011 - 17:04
Jeffrey Rogers Hummel
Ellen Green, "Why Banks Aren't Lending: The Silent Liquidity Squeeze," is an excellent article on the consequences of paying interest on reserves, despite its proposed policy at the end. I stumbled on it because it favorably quotes me. Particularly important is its discussion of the impact on interbank lending, the ramifications of which hadn't occurred to me. David Henderson has a stimulating post on the article over at Econ Log.
Sunday, July 17, 2011 - 16:18
Jonathan J. Bean
This past week the governor of California signed a law that requires the teaching of gay history in textbooks used in government schools. That’s bad, but not for the reasons so-called “conservative” groups imagine.
Government schools in California and Texas determine what is used in textbooks nationwide. The textbook boards in California lean toward fashionable “lifestyle liberalism” and Texas leans right toward “traditional values.” The result of this politicization of content? The killing of history as a subject that is alive with controversy and where the “good guys” and “bad guys” can’t be reduced to cartoon characters. This latest move is just the latest of Left and Right battering history in government schools until it is a tasteless pulp lacking any flavor, punch, passion or debate. Instead, it is a limp noodle of sympathetic characters and noncontroversial “bad guys” demanded by innumerable pressure groups.
The immediate reaction is to say “why shouldn’t they teach about homosexuals in history?” Indeed. Ever since I started teaching at The Ohio State University, I included a discussion of gays and lesbians in a lecture on the Long Sexual Revolution. But prescribing what I must teach and how I must teach it keeps...
Friday, July 15, 2011 - 12:01
If we credit the reports coming to us from the mainstream news media–and I am certainly not suggesting that we should–the Democrats and the Republicans are locked in a fierce struggle over whether to increase the government’s statutory debt limit. The administration and its supporters in Congress insist that taxes be increased as part of the deal, whereas congressional Republicans insist that taxes not be increased and that substantial spending cuts be made to trim the future stream of budget deficits (i.e., additions to the federal debt). Negotiations have been tense, we are told; the president recently waxed petulant and stalked out of a meeting. Heavens!
Despite the seeming impossibility of resolving this conflict, an easy solution lies at hand, and as a public service, I feel compelled to divulge it, so that the entire matter may be resolved at once and the acrimony put, as they say, “behind us” as we march stoutly toward the Brave New World that awaits us.
First, however, permit me to digress for a moment. For the past thirty years, I have been writing about the undeniable fact that the federal government has grown into a grotesquely bloated monstrosity whose size, scope, and power greatly exceed not only the limits prescribed by the Constitution, but also the limits of what men, women, and children can long endure. If this description was true in 1981–and it manifestly was–it certainly is true in 2011. So, it clearly would effect nothing more than a common-sense, morally compelling, and highly productive step if the government were, say, to reduce itself to its dimensions as of thirty years ago. My personal preference would be to return the government to its size, scope, and power as of 1929, as a first...
Thursday, July 14, 2011 - 22:14
Roderick T. Long
Jesse Walker’s latest column does a great of replying to internet critics like Eli Pariser, Andrew Shapiro, and Cass Sunstein, who think the internet is isolating us from viewpoints we disagree with.
You can post a comment disagreeing with him, but I won’t read it.
Tuesday, July 12, 2011 - 00:30
Roderick T. Long
The Argounov summer residence stood on a high hill over a river, alone in its spacious gardens, on the outskirts of a fashionable summer resort. The house turned its back upon the river and faced the grounds where the hill sloped down gracefully into a garden of lawns drawn with a ruler, bushes clipped into archways and marble fountains made by famous artists.
Saturday, July 9, 2011 - 00:33
Christopher Turner, author of Adventures in the Orgasmatron: Wilhelm Reich and the Invention of Sex (London: Fourth Estate), describes here how J. D. Salinger, Saul Bellow and Norman Mailer were all devotees of the orgone energy accumulator, whose inventor, Wilhelm Reich, claimed that better orgasms could cure society's ills. Over the years some libertarians have been interested in Reich, not least because he was a victim of FBI and FDA repression.
Thursday, July 7, 2011 - 14:07
I sent Senator Mikulski a message in support of Ron Paul and Barney Frank's bill to legalize marijuana at the federal level and she replied "I'm against legalization of marijuana." My response is below:
Dear Senator Mikulski
If you are against the legalization of marijuana then you are for wasting 40 billion dollars a year persecuting people who choose to use it rather than alcohol or prescription drugs with suicide warnings on the label. Those who talk about the harms of marijuana are all people who benefit from this persecution. Your statement here shows you to be an ignorant selfish arrogant woman that knows absolutely nothing about marijuana. Like most politicians you know about one thing and one thing only, lying your way into office. The reason you want to keep persecuting people who make the perfectly rational decision to use marijuana is not to protect them from anything but rather because you selfishly think that this stand will help keep you in office. Never mind the police violence your position encourages. Never mind the families you break up, the children you deny parents Never mind the employers that you cause to lose valuable workers. Never mind the brutal treatment of marijuana users in prison who unlike you do not commit or constantly sanction violence....
Wednesday, July 6, 2011 - 11:16
Roderick T. Long
Check out this interview with my co-conspirator Gary Chartier, mainly about his book Conscience of an Anarchist, on Bathabile Mthombeni’s radio show.
The interview starts at around 5:25 in. (And if you just want Gary and not music, and so prefer to skip the midshow musical interlude, that runs from 25:36 to 28:40.)
Wednesday, July 6, 2011 - 15:35
For weeks, we have been treated to comic opera in D.C.’s
theater of the politically and economically absurd. On the stage, the actors — President Obama, the Secretary of the Treasury, congressional leaders — hop about, shouting moronic lines about the national “default” that will occur unless the government’s statutory debt limit is raised, reciting Chicken Little lines about how such a default will trigger worldwide economic catastrophe. According to a report
in yesterday’s Christian Science Monitor,
Facing an Aug. 2 deadline, Congress and the White House are stepping up face time to avert what the Treasury Department has called “catastrophic economic and market consequences” of a default on the national debt.
Think about this statement. Have governments defaulted in the past? Of course, they have, on hundreds of occasions over the centuries. Have these defaults triggered “catastrophic economic and market consequences”? No. When a government defaults, there are consequences, of course, including heightened reluctance of lenders to lend to the deadbeat government in the future or at least to lend at such favorable interest rates. Often partial payments of principal and interest are arranged or debts are restructured. The world keeps spinning.
Has the U.S. government ever defaulted before? Yes, in 1933, by...
Monday, July 4, 2011 - 23:24
The heart of the Declaration of Independence adopted by the thirteen united colonies of British North America on July 4, 1776, is as follows:
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness. Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security
On these grounds, the colonists took up arms against the long-established state under which they lived, and thousands of them perished in the struggle to secede from the British Empire.
Did the argument they advanced to justify their actions have any force? If it had force then, does it not have equal force today – nay, does it not have a thousand times...
Saturday, July 2, 2011 - 13:04
Roderick T. Long
The following passage (CHT Jesse Walker) from Ehrlichman’s Witness to Power: The Nixon Years, quoting Nixon on same-sex marriage in 1970 –
I can’t go that far; that’s the year 2000! Negroes [and whites], okay. But that’s too far!
– irresistibly reminds me of these lines toward the end of the recent Doctor Who episode “Day of the Moon,” set in 1969:
DOCTOR:Canton just wants to get married. Hell of a reason to kick him out of the FBI.
NIXON:I’m sure something can be arranged. … This person you want to marry – black?
NIXON:I know what people think of me, but perhaps I’m a little more liberal –
CANTON:… he is.
NIXON:I think the moon is far enough for now, don’t you, Mr. Delaware?
CANTON:I figured it might be.
It struck me because I’d seen DW viewers complaining that it was “unrealistic” that Nixon would even have so much as considered the issue of same-sex marriage.
Friday, July 1, 2011 - 11:21
Jane S. Shaw
I don’t know which brought tears to my eyes—the negligence on the part of the famed Great Books school, the University of Chicago, or Joe Bast’s
extraordinary devotion to learning. You will not read this unmoved: “My Eight Years as an Undergraduate.”
Wednesday, June 29, 2011 - 00:48
Someone must have imagined that my hopes for improved economic understanding might be excessively optimistic today and thus needed to be curbed to restore my normal emotional balance, because that person undertook to smash any such hopes to dust by e-mailing me a link to a HuffingtonPost article by Paul Abrams, “Economically, World War II Was Stimulus on Steroids.” This screed turns out to be an ostensible macroeconomics lesson composed in equal measure of economic foolishness, historical ignorance, and ideological tendentiousness – the veritable epitome of a worse-than-worthless contribution to public enlightenment.
The opening paragraphs indicate the direction of Abrams’s argument:
The next time someone argues that the New Deal failed, and only the Second World War ended the Depression, as ‘proof’ that government spending does not work, one can respond with the details of economic growth and unemployment reduction up to 1940, or one can ignore the claim and thank them for making your case for massive government spending in a deep, broad recession.
Right wing politicians are loathe to credit the New Deal with any success in hoisting the United States out of the Great Depression, but credit World War II for that achievement, believing that that somehow disproves Keynesian economic theory.
That claim, however, undermines their entire premise.
Abrams concludes that “massive government...