Liberty & Power: Group Blog
Just today, we are treated to the spectacle of the Times waving it’s pom-poms , assuring the reader that yes, TARP is a bonanza for the much beloved taxpayer. “About $4 Billion So Far” the article assures us all heavy breathed, but I couldn’t long control my laughter as the third paragraph tells us “there early returns are by no means a full accounting”, effectively shooting to hell the rest of the article.
I’d stop buying the Times, but laughter is the best medicine…
Jane S. Shaw
At the Pope Center, we have just published a a dialog among reformers and educators that discusses what the role of the federal government, if any, should be in forcing transparency. The discussion uncovers two clear alternatives: “top-down” pressure (mostly from the feds) and a Hayekian decentralized pressure that will arise spontaneously, at least under some conditions.
In this dialog (two more parts will be published later) Neal McCluskey of Cato, Michael Rizzo of the University of Rochester, and I (to a small extent) offer the Hayekian perspective. And Roger Ream of the Fund for American Studies throws a monkey wrench into the entire transparency movement by saying that he has access to all the information he needs, thank you. If the topic interests you, the dialog will, too.
David T. Beito
The Chicago Tribune (T.R.M. Howard's and Emmett Till's hometown newspaper) and the Washington Post were not interested in running this piece linking Howard to the anniversary of Emmett Till's slaying nor was the Washington Post. Fortunately for us, the Los Angeles Times picked it up:
Howard's place in history has been woefully slighted. Without him, we might never have heard of Rosa Parks, Fannie Lou Hamer, Medgar Evers or Operation PUSH. Howard was the crucial link connecting the Till slaying and the rise of the modern civil rights movement.
The picture above shows Howard with Emmett's mother, Rep. Charles Diggs, and trial witnesses.
That said, younger readers might like to get up to speed on his youthful misadventures by reading Zad Rust's best seller from 1971, the Tedrows' expose from 1976, or Leo Damore's indictment from 1988.
Then, after repeated urgings from my wife, I picked up and read Watchmen , the cream of the graphic novel crop. Much to my utter surprise, I cannot recommend it more. It is, hands down, one of the greatest novels (yes, novels) I have ever read.
Even if it does have masked avengers in it.
Did anyone, even two or three years ago, expect this situation to develop? We need to go back only ten years, to fiscal year 1999, to reach a time when the government’s total outlays were smaller than this year’s deficit. Ay, mamacita, what’s going on here?
To get some perspective on how totally crazy the government has gone in its almost incredible overreaction to the financial and economic developments of the past year, consider that during World War II, which was paid for mainly by borrowing, the government ran deficits during the fiscal years 1941-46 that added about $191 billion to the national debt by the end of this period. Since 1947, when price controls no longer distorted the price indexes, the GDP deflator has increased about 8 times and the consumer price index almost 10 times. To be conservative for present purposes, let’s use the CPI to adjust the purchasing power of the dollar. We may conclude then that in present dollars, the deficits the government incurred to fight the greatest war in history, for the six years in total, amounted to about $1,910 billion, or only 9 percent more than the deficit expected in the current fiscal year – a wartime year, to be sure, but the present wars are certainly not large ones by historical standards.
Maybe it would be better if the government scrapped its present budget entirely, and provoked the Japanese to bomb Pearl Harbor again. Then we could fight World War II over. Yes, yes, many people would have to die, but the Pentagon could compensate these unfortunates by awarding each of them a posthumous Silver Star, and in a strictly financial sense, this plan would be much cheaper than what the government is doing now. The largest deficit of the war, incurred in fiscal year 1943, was, in today’s dollar’s, about $546 billion, or less than a third of the deficit the Obama regime (building on the Bush regime’s proligacy, to be sure) will run this year.
Although this essay was published in June 2007, it is well worth reading and very pertinent to the current controversy.
No one ever assigned or recommended this book to me when I was a student. Indeed, no one ever mentioned it. Only a few years ago did I become aware of it, when I encountered favorable mentions of it by economists whose views I greatly respect. Several years ago, Larry White kindly photocopied the book and sent me a copy, but until recently, I had read only a few parts of it.
Now, having read it from cover to cover, I am willing to say that I know of no better book on the economic dynamics of the 1920s boom and early 1930s bust in the United States. I know about several other excellent books that every student of economics and economic history should read on the same topics, but if I could recommend only a single book to an aspiring economist, or even to an interested lay reader, this is the one I would recommend.
It is tempting to characterize its theoretical framework as Austrian, as indeed it is in many respects (Mises and Hayek are cited favorably, along with many other sound economists, many of them now forgotten), yet Phillips, McManus, and Nelson’s framework is broader and more eclectic than a strictly Austrian analysis would be. Moreover, besides being packed with excellent economic analysis in a great variety of applications, the book contains a wealth of quantitative evidence, which the authors handle with admirable caution and good sense. They present many tables and charts, but not a single equation. For modern mainstream economists, who can scarcely move a muscle without writing a raft of equations, this book stands as a brilliant reproach.
To give you a taste of these authors’ views and to whet your appetite for reading their book, I present here a few passages, drawn from various sections in more or less random fashion.
• [T]he recent depression will be seen to have been directly connected with the efforts at reconstruction that followed after the dislocations caused by war. The ultimate causes of the depression are traceable to the War; just as the late war was the Great War, the recent depression was the Great Depression. But the more immediate causes of the depression grew out of the post-War inflation of bank credit in this country. (p. 4)
• An investment deflation, or a deflation of capital values and capital assets, is a much more prolonged process than a commodity, or commercial credit, deflation. (p. 161)
• The execution of the [Federal Reserve] Board’s control operations [in the 1920s] involved inflationistic action if stabilization of the price level was to be achieved, in the sense that it artificially maintained that level and forestalled the inevitable and natural decline which otherwise would have accompanied the post-War expansion of production, and hence explains the bank credit inflation which resulted. (p. 184)
• There is nothing inherently bad in a falling price level (in fact, there is much to commend it . . . ), provided the rate of decline is gradual. (p. 186)
• If all prices [including asset prices] are considered, then, it is clear that an inflationary price rise actually did occur in the period following 1922, despite the fact that wholesale commodity prices were relatively stable. (p. 191)
• The shrinking of business failures to a minimum at the same time that prices are rising is usually a storm signal for the economic system in the not-so-distant future. And the government is almost always, in the subsequent depression, importuned to “take care of” those rash adventurers who (with more credit than sense at their disposal) rushed into those industries where soberer business judgment indicated the treading was not good. (p. 207)
•[Commenting on the government's measures to reverse or moderate the depression] Foolhardy procedures which are divorced from economic realities, or whose economic implications are not understood by their promoters, do not perforce become sanctified and wise merely by designating them as “action”; tilting at windmills does not draw water. (p. 212)
• [W]e must save our way out of depression, we must increase the real savings that make the creation of real capital possible, instead of spending our way to recovery by cumulating governmental deficits which concentrate attention on consumption as has now been done for five years. (p. 218)
• There is no quarrel [by the authors] regarding the desirability of higher prices for some classes of goods, but there is disagreement with the view which holds that monetary and credit manipulation alone will suffice to cure the unbalances left over from the depression. (p. 241)
• [C]onditions in the investment market are still [early in 1937] such that extensive long-term investment is not being made. (p. 242)
This remarkable book deserved a far, far better fate than to have faded into near-oblivion. Indeed, if it, rather than Keynes’s General Theory, had been the point of departure for subsequent study of macroeconomic fluctuations, the world almost certainly would have been a much, much happier place.
A key feature of the agreeement, however, was the secret protocols that accompanied it, by which the USSR and Germany divided eastern and central Europe into “spheres of influence” and provided that each side might occupy its sphere should “territorial and political rearrangements” be made in these areas. In other words, they agreed on a plan for carving up the entire area between the USSR and Germany as their borders existed at that time.
Seventeen days after the German invasion of Poland, the Russians invaded from the other side and quickly occupied the Polish territories identified as the Soviet sphere of influence in the Molotov-Ribbentrop Pact. Afterward, the two sides cooperated economically and militarily in subduing the Poles and in supplying one another with various raw materials and manufactured goods, including military arms and equipment, as well as plans for weapons.
The pact, which came as a great surprise to almost everyone, created a potentially huge embarrassment for the many Soviet sympathizers in the West, including those in the United States, who had worked tirelessly for years to move public opinion against the fascists in general and Germany in particular. But, like the mindless marionettes they were, they missed not a beat, switching virtually overnight to praise for Stalin’s efforts to promote world peace and opposing war against Hitler.
Further potential for embarrassment arose in June 1941, when, notwithstanding the Molotov-Ribbentrop Pact, the Germans invaded the Soviet Union. Disdaining embarrassment, the Roosevelt administration immediately embraced the mass murderers in Moscow and maintained them in a tight embrace for the balance of the war. Strange bedfellows, indeed.
Four years ago, Americans who found the approaches of perpetual war and a Big Brother surveillance state to be undesirable, unnecessary or counterproductive means of bringing justice to the 9/11 mass murderers were accused of not facing reality. Treating 9/11 as a crime, we were told, would never nab the villains. Only by unleashing the dogs of war, by going on the offensive, and by shifting the"balance" from liberty toward security could America destroy the enemy, neutralize the immediate threat, and ensure our freedom and safety. Well, let us consider what has happened in the last four years.
Delicious! If anyone is more clueless than PC advocates about the real concerns of average people, then it has to be academic PC advocates. Case in point...The University of Iowa held a panel"to discuss sexual harassment with students." No students showed up. So the panel discussion became"how to get young people to focus on the issue." The fact that students -- from first-year to grad-level, from enthusiastic newcomers to wisdom-steeped twenty-somethings -- did not think the free information was worth showing up for did not daunt the panel, whose livelihoods may well be somehow connected with sculpting or enforcing UI policy. They know better than the average student how he or she should be expending their time and attention. It should be spent on what they value, not what the student values. Everyone on that panel should GET A JOB!
Jane S. Shaw
Norrell challenges the negative images of Washington that have been engrained in the modern mind--one as an “Uncle Tom” compromiser and another as a “cunning and ruthless strategist” (the latter phrase is Sanneh’s, reflecting Louis Harlan’s 1972 portrait). Sanneh says that Norrell describes Washington as “more like a man under siege, projecting strength and flexibility because he knew how precarious his empire was.”
It will be interesting to see if Norrell’s view of Washington as a “heroic failure” gains traction.
Sanneh, for one, never quite accepts that view. He seems to minimize the value of compromise and accommodation, implying that Washington should have acted differently, perhaps more like his rival W. E. B. Du Bois. And Sanneh suggests that Washington had a character flaw that made him act deceptively, including toward fellow blacks (although his five-page article doesn’t list outright deceptions).
I haven’t read Norrell’s book yet, but I did read his 2005 The House I Live In: Race in the American Century, which gives plenty of reasons to believe that Washington’s position was precarious. It underscores the viciousness of race relations in turn-of-the century and early-20th-century America (and not just in the South). Just as Washington was trying to give blacks a blueprint for progress, laws were proliferating that solidified white control, backed by lynchings (nearly 200 a year in the 1890s) and other violent actions.
In that environment, would Washington have been more successful with something other than a strategy of practical education, social separation, and avoidance of politics? And perhaps he was successful, building a foundation (symbolized by Tuskegee Institute) that served blacks well during a time of oppression, even though its philosophy was eventually rejected.
Others who know much more about this than I do are the ones to evaluate Booker T. Washington's successes and failures for the current generation. But that evaluation should, at the least, be based on the environment in which he lived, not on the one we live in today.
Despite the request for forgiveness this incident has a much greater potential to harm Phelps’ prospects than a previous drunk driving arrest. Commentators are questioning the sincerity, asking was he sorry he did it or was he sorry he got caught? And, of course, the charge that he has failed to provide a good role model, thereby hurting the nation’s youth, is being made.
However, if marijuana were legal then the America’s young swim fans would not know about Phelps’ smoking habits because the picture would not be a news story. In fact, the whole situation is an indictment of cannabis prohibition. It is not very likely that this photo depicts the first time Phelps has used marijuana, yet none of the alleged reasons such use must be punished severely can be found in the swimmer’s behavior. Because of his prowess as an athlete he is one of the most scrutinized people on the planet but there have been no signs of murderous rampages, blatant insanity, or any violent actions. He often appears in public wearing only a speedo with no hint of needle tracks indicating the use of heroin or any other drug through injection. Also, is anyone seriously going to accuse Michael Phelps of being apathetic and lazy due to amotivational syndrome?
There is no damage to Michael Phelps that can be attributed to the use of marijuana other than the fact that the press found out about it. That this one photo can instantly turn a beloved icon in to a disgraced loser says more about the hypocrisy of our society than it does about him.
Cross posted on The Trebach Report
Aeon J. Skoble