The CDC Slashed the COVID-19 Fatality Rate to a Fraction of Earlier Estimate Used to Justify Lockdowns

The CDC Slashed the COVID-19 Fatality Rate to a Fraction of Earlier Estimate Used to Justify Lockdowns

05/26/2020Ryan McMaken

Governments throughout the world and across the US justified extreme, draconian, undemocratic, and unconstitutional (in most US states) "lockdown" and stay-at-home orders on the grounds that the COVID-19 virus was exceptionally fatal.

In March, the World Health Organization (WHO) was claiming that the fatality rate was a very high 3.4 percent.

Yet as time went on, it became increasingly clear that such high estimates were essentially meaningless because researchers had no idea how many people were actually infected with the disease. Tests were largely being conducted on those with symptoms serious enough to end up in emergency rooms or doctors' offices.

[RELATED: "The Experts Have No Idea How Many COVID-19 Cases There Are" by Ryan McMaken]

By late April, many researchers were publishing new studies showing that the number of people with the disease was actually much higher than was previously thought. Thus, it became clear that the percentage of people with the disease who died from it suddenly became much smaller.

Now, the Centers for Disease Control and Prevention (CDC) has released new estimates suggesting that the real fatality rate is around 0.26 percent.

Specifically, the report concludes that the "symptomatic case fatality ratio" is 0.4 percent. But that's just symptomatic cases. In the same report, the CDC also claims that 35 percent of all cases are asymptomatic.

Or, as the Washington Post reported this week:

The agency offered a "current best estimate" of 0.4 percent. The agency also gave a best estimate that 35 percent of people infected never develop symptoms. Those numbers when put together would produce an infection fatality rate of 0.26, which is lower than many of the estimates produced by scientists and modelers to date."

Of course, not all scientists have been wrong on this. Back in March, Stanford scientist John Ioannidis was much, much closer to the CDC's estimate than the WHO. The Wall Street Journal noted in April:

In a March article for Stat News, Dr. Ioannidis argued that Covid-19 is far less deadly than modelers were assuming. He considered the experience of the Diamond Princess cruise ship, which was quarantined Feb. 4 in Japan. Nine of 700 infected passengers and crew died. Based on the demographics of the ship’s population, Dr. Ioannidis estimated that the U.S. fatality rate could be as low as 0.025% to 0.625% and put the upper bound at 0.05% to 1%—comparable to that of seasonal flu.

Not that this will settle the matter. Proponents of destroying human rights and the rule of law in order to carry out lockdowns will continue to insist that "we didn't know" what the fatality rate was back in March. The lack of evidence, however, didn't stop proponents of lockdowns from implementing policies that destroyed the ability of families to earn a living, and which also created social conditions that caused child abuse and suicides to spike.

But for more sane people, extraordinary claims require extraordinary evidence. Those who have claimed that lockdowns are "the only option" had virtually no evidence at all to support their position. Indeed, such extreme over-the-top measures as the general lockdowns required an extreme level of high-quality, nearly irrefutable evidence that lockdowns would work and were necessary in the face of a disease with an extremely high fatality rate. But the only "data" the prolockdown people could offer was speculation and hyperbolic predictions of bodies piling up in the streets.  But that became politically unimportant. The people who wanted lockdowns had gained the obeisance of powerful people in government institutions and in the media. So actual data, science, or respect for human rights suddenly became meaningless. All that mattered was getting those lockdowns. So the lockdown crowd destroyed the lives of millions in the developed world—and more than a hundred million in the developing world—to satisfy the hunches of a tiny handful of politicians and technocrats.

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Shelton Over Kelton

09/10/2021Robert Aro

Judy Shelton and Stephanie Kelton; one was denied a congressional appointment to the Federal Reserve because she asked questions, the other found reward by telling the establishment exactly what they wanted to hear. Last week Judy Shelton published an article in the Wall Street Journal that was nothing short of honest, aptly titled: Congress Needs to Rein In a Too-Powerful Federal Reserve.

Opening with a mention to banks, money managers, and other investors who hang on to every speech from the Fed, looking for clues as to what their actions mean for their portfolios. She quickly answers the question: What about everyone else?

But for people who live off paychecks rather than portfolios, the game of deciphering Fed officials’ intentions is a sideshow that leaves them further behind. This is no way to run monetary policy. Our nation’s central bank has become too prominent, too political and too powerful.

It doesn’t require a PhD to understand. When the Fed unleashes trillions of dollars into the market and holds interest rates low, the benefit goes to those who are able to get this new money first. This goes into the bond, housing, and stock market pushing prices up. The Fed has never clearly explained how they think this helps people working outside of the financial industry.

Shelton confirms the influence on assets and interest rates:

The Fed’s ability to purchase massive quantities of U.S. Treasury securities is the dominant factor influencing interest rates across the board and thus the valuation of financial assets… What would that benchmark yield reveal if Fed purchases weren’t distorting the market?

Her technical acumen is always impressive:

The Fed’s prominence not only undermines supply-and-demand interactions for accurately pricing the cost of investment capital; it also compromises the relationship between fiscal and monetary policy.

For a long time, the relationship between fiscal and monetary policy has been blurred. With Congress unveiling multi-trillion loans every few months, spending amounts well over tax revenues, there is no question that the Fed funds the nations’ fiscal policy through asset purchases.

She notes:

Meanwhile, the Fed continues to accumulate those assets—its current $8.33 trillion balance sheet total equals 37% of U.S. gross domestic product.

What resonated most was when she discussed lower income workers and minorities. All too often the Fed mentions them as a talking point, noting their existence, but little else about the financial problems they face. Whereas Shelton gives the answer:

…Mr. Powell laments that “joblessness continues to fall disproportionately on lower-wage workers in the service sector and on African-Americans and Hispanics” …the Fed’s solution of buying Treasury debt and agency mortgage-backed securities seems ill-suited to the problem. It hardly improves the financial prospects of those not invested in rising equity markets. It doesn’t make today’s median-priced $374,900 home more affordable, even with rock-bottom mortgage rates.

Unfortunately, Shelton had her shot… But Republicans like Mitt Romney and Susan Collins voted against her appointment. She never had enough votes and was not appointed to the Fed’s Board of Governors.

Reading the quotes above, could anyone confidently stand up and say that they disagree with her ideas?

Of course, there is Stephanie Kelton. Ironic as just a few days after the Wall Street Journal article, Kelton was named as “One of the Most Creative People in Business” by Fast Company. This is a magazine which caters to “progressive business leaders.” Her university published the article, where they discussed the Covid spending bills. Kelton noted the relief efforts of:

…$5 trillion with no problem and no tax increase.

In the article, Stephanie Kelton likened herself to an eye doctor who corrects people’s vision:

If I’m an optometrist, my job is to fix your vision… I just fix your eyes. That’s how I think of my role as an educator.

Makes sense. But where does one go when the doctor suffers from severe myopia of both economic history and reality?

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Biden's Vaccine Fiat Forges a Fascist Pharma Corporate State

09/09/2021Connor Mortell

About six months ago, I wrote an article here explaining that state preemptions of local government are a bad thing—even when Ron DeSantis does it. I vehemently stand by these principles. However, it is now time for Ron DeSantis to take that principle of decentralized control and run with it—against the Biden administration. Just as it is acceptable to see local governments passing laws in defiance of their state, it is now time for the states to pass laws in defiance of the federal government. This is because on September 9, 2021, President Joe Biden announced that all employers with one hundred–plus employees will be required to mandate vaccines or weekly negative covid tests.

Never in my lifetime has something occurred that was so egregiously opposed to Misesian concepts of liberalism and freedom. In fact, this is directly in line with perhaps the most opposite ideology to liberalism: fascism. Benito Mussolini said himself that “Fascism should more appropriately be called corporatism because it is a merger of state and corporate power.” In today’s political discourse, people abuse the word fascism and sometimes even cite this definition of corporatism while stretching it somewhat from the truth. However, the state requiring that businesses require the vaccine from one of three large corporations that were propped up by the state is undoubtedly the merger of state and corporate power that Mussolini dreamed of.

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In my earlier-mentioned piece criticizing DeSantis’s intervention remitting fines passed by local governments in regard to local covid regulations, I had two main issues with the order. First, was a preference for localism, citing the president of the Mises Institute, Jeff Deist, who claimed that “Insisting on universal political arrangements is a huge tactical mistake for libertarians.” This concern is even more true as it relates to Biden’s newest announcement, as this is simply another universal political arrangement, now expanding to the national level. My other concern was that the a sweeping universal political arrangement like this—even in the best-case scenario, when the decision is hypothetically good for everyone with no cost—sets a precedent that the central state now has authority over that issue.

Right now, take a moment to think of the issue that is by and far most important to you. We all have one. Then think of the politician that threatens that more than anything. Do you want that individual to have this precedent to rely on when he or she takes power one day?

Luckily, the solution to this was described by the great Tom Woods:

Nullification is the Jeffersonian idea that the states of the American Union must judge the constitutionality of the acts of their agent, the federal government, since no impartial arbiter between them exists.

Many businesses across the country will act in civil noncompliance, but that is simply not enough. If one wants to see this end, states across the country will have to undoubtedly reject this. I am not here to make any criticisms of the vaccine. I still stand by my initial piece that these bans on mom-and-pop shops wanting not to run the risk of interacting with unvaccinated individuals is a dangerous threat to liberty. However, I’d argue that any act of nullification at this point has little or nothing to do with the vaccine or the pandemic. We are now facing one simple question: Will we accept or reject a precedent for the merger of state and corporate power? If we choose to reject it, then the governors of the free state of Florida as well as New York, the governors of Texas as well as California, all these governors alike must stand firm against this tragedy.

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It Is all the Wokesters' and Government's Fault

09/09/2021Walter Block

All major problems can be fairly laid at the door of the government, particularly on the woke philosophy that energizes all too much of its behavior.

They take half the GDP away from us. Most of these funds are spent in wasteful ways: paying people not to work; welfare, which breaks up the family; subsidies to all and sundry. Worse, an awful lot of it is spent on inculcating regulations, licenses, dictates, which further reduces the ability of the private sector to create affluence. Maybe, without their "helping us," our prosperity could be quadruple what it is now. In sharp contrast, during the feudal days, the lord required the serfs to work on his lands only two days per week, for a grand total tax rate of about 28%. This compares rather favorably to our above 50% tax take. True, there were other onerous requirements imposed upon the serfs, but still, this gives us pause as to how far down the garden path we've gone.

What would we do with these great riches were we to have them at our disposal?

One thing for sure would be to invest in weather control. The Ida storm has wrought havoc in southern Louisiana and has led to death and destruction in a large swath of states to the north and east of the Pelican State. In a hundred years, maybe even fifty, cloud seeding technology could make this sort of weather outrage a thing of the past. What can bring this happy date a bit closer? For one thing, if we were much richer, a least a portion of that capital, human and physical, would be used for this purpose. For another, stopping affirmative action and going back to merit as the criterion for choosing our scientists, mathematicians, engineers, etc. would be a step in the right direction. Instead, wokester Harvard and its ilk are busily attempting to justify the quotas they impose upon very bright students who have the wrong skin color. The National Institute for Health is demanding that the laboratories of the nation "look like America" in terms of pigmentation if they want to be funded. Happily, the Mississippi Levies have not failed this time around, as they did during Hurricane Katrina. Then, they were under the auspices of the Army Corps of Engineers, which is in charge of these flood protections to the present day. Had this portion of the economy been privatized, that would not have long endured. As philosopher-economist Thomas Sowell reminds us: "It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong."

Another avenue for investment would be the battle against COVID. The Biden administration is imposing all sorts of regimentation on the citizenry while not doing very much at all to stem the invasion of this disease from carriers flooding through our southern border. It is complicit, too, in undermining merit in terms of laboratory membership—the very people upon whom we rely to innovate our way out of this mess. Instead, the powers that be are focusing their energies on canceling naysayers, lifting their medical licenses. They supposedly rely on "science" to justify their ham-handed orders, but this is the opposite of open-ended inquiry.

One of the problems in this regard is the doctor shortage. We hear tales of heroic physicians working around the clock into exhaustion. This is admirable. But why do we have so few people in the medical field? This problem, too, may be laid at the door of the government. They support and are complicit with the American Medical Association's vicious practice of restricting entry to this sector of the economy.

Then there is the debacle of Afghanistan. The U.S. poured billions in treasure, and thousands of precious lives, into an attempt to turn that country into an Asian version of New Hampshire. They learned nothing from the failure of the French, and then our American forebears, to accomplish something similar in Vietnam, nor from the Russian decades-long failure in Afghanistan to impose institutions that are foreign to the Afghans. The U.S. military, instead of focusing on preparedness, turned its attention on a whole host of mission-irrelevant politically correct social justice concerns. Perhaps that is all to the good if it lessens U.S. adventurism abroad. Unfortunately, this is not bloody likely. This institution is like a small weak boy who is mouthy and derisive: not a good combination.

What is the best way ahead? Less social justice. More plain old ordinary justice. Then reduced statism. "That government is best which governs least" is a truism for a good reason: it is tried and true.

Reprinted with permission of the author.

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Toronto Star Promotes Hate of Unvaccinated People

09/08/2021Lee Friday

On August 26, this headline was splashed across the front page of the Toronto Star newspaper:

If an unvaccinated person catches it from someone who is vaccinated, boohoo, too bad. I have no empathy left for the willfully unvaccinated. Let them die. I honestly don’t care if they die from COVID. Not even a little bit. Unvaccinated patients do not deserve ICU beds. At this point, who cares. Stick the unvaccinated in a tent outside and tend to them when the staff has time.

Below the headline, and below the fold, the Star notes in fine print “Selection of recent posts on Twitter.” Presumably this explains the use of alternating bold text, to distinguish the various Twitter posts. But this does not lessen the inflammatory nature of the headline.

While the necessity of hate speech laws is debatable, the fact is that (a) such laws exist in Canada, and (b) the Star broke those laws with its headline. But that is not what prompted me to write this article. Instead, what grabbed my attention was the fact that the headline did not generate any criticism from Canadian political leaders, or from other mainstream media outlets.

Conversely, if an obscure media company published a hateful, but inconspicuous (page 28), headline directed toward any ethnic minority group, or the LGBTQ+ community, politicians and mainstream media outlets would be tripping over themselves to see who could be the first to condemn such hateful, divisive, journalism. So why are they silent about hate speech directed toward the minority group of unvaccinated people?

In contrast to the silence from Canada’s political leaders and the mainstream media, many readers complained about the headline, thus eliciting a backhanded apology from the Star, which we are supposed to interpret as “We made a mistake, and if we could go back, we would not run that headline.” That is doubtful. Editors choose their front-page headlines carefully. Think about it. The provocative headline is prominently displayed on the front page, but the actual story is found on page two, under a different headline that reads, “When it comes to empathy for the unvaccinated, many of us aren’t feeling it.” This headline is more palatable, and it is a much better description of the content of the story, but the Star made a conscious decision not to use it on the front page.

Instead, the front-page headline represents the Star’s compilation of various Twitter posts neatly arranged in a way that promotes a hateful, inflammatory narrative that is all too common in social media. This is blatantly obvious. It did not happen by accident. Why the Star printed the headline is open for speculation, but the headline itself was not an oversight, and the editors probably had their so-called apology prepared in advance. This reminds me of a scene I saw recently in a television program, where a reporter refused to submit her story because it would cause unnecessary harm to several people, and her editor told her that she would never be promoted until she learned that scruples have no place in journalism.

Ironically, on the same day the Star ran that headline, they also published an article bemoaning Canada’s “hate crime crisis.” The Star is either the pot or the kettle; take your pick.

It seems that politicians and the mainstream media condemn hate speech only when it is directed toward groups with whom the government wants to curry favor, and unvaccinated people are not one of those groups. As Canadian politicians tighten the noose with their imposition of vaccine passports, perhaps it is becoming fashionable to direct hate speech toward unvaccinated people.

Will the promotion of this hateful narrative by a mainstream Canadian media outlet—which gets a free pass from Canada’s political leaders—encourage some people to commit violent acts against unvaccinated Canadians, on whom they previously only wished death. After all, if the Toronto Star’s narrative gets a free pass … ?

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"Defund the Police" and "Thin Blue Line" Activists Are Both Wrong

09/08/2021Nick Stiles

The deep political and moral divisions between Americans were plainly exposed during the controversy over the police sparked by the death of George Floyd. The Left further radicalized, while conservatives dug their heels deeper into the status quo, staunchly defending what appeared to them a hallmark institution of Western civilization. Calls for “defunding the police” became mainstream on the left, while the slogan “Blue Lives Matter,” represented by a black American flag with a thin blue line (henceforth referred to as Thin Blue Line or TBL), soared to great popularity among conservatives. Many libertarians sided with the Left on this issue, seizing the opportunity to score political points and scavenge for a few more votes from disaffected “socially liberal” voters.1 According to them, the Left in this instance was advocating a libertarian policy and the Right was showing its statist side. However, libertarians who threw their support behind the Left failed to recognize the intellectual foundations of each position. If their misunderstanding persists, it could have disastrous results vis-à-vis the future establishment of a free society.

At first glance, it appears that libertarians should side with those calling for “defunding the police” over those wishing to increase taxation (the alternative to defunding is increasing funding) and enhance the authority of the state. However, the intellectual divide between libertarianism and all properly leftist ideologies is so profound that it necessitates their dissociation. The disagreement centers on the concept of property rights, a theory of which must form the foundation of libertarianism.2 The significance of this disagreement is underscored by the fact that any definition of the terms “liberty” or “aggression” ultimately falls back on a definition of property. Consider what a leftist would think about a man who beat up someone robbing his store. They would see the store owner as the aggressor, because, according to a common rationalization for looting, “destroying property is not violence.”3 But the true aggressor is the robber; the store owner merely defended what was his. Leftists either completely reject the libertarian concept of property or theorize it in an antilibertarian manner.

If libertarianism is contradictory to the theoretical foundations of nearly all strands of leftism, then how can the apparent similarity between their positions on policing be explained? This apparently confusing fact is due to two misunderstandings, the first of which is the belief that the United States is a completely free market nation. This myth is treated as fact by the majority of people on both the left and the right. However, the very existence of tax-funded police, not to mention innumerable other socialistic American institutions, makes it impossible for the United States to be a purely capitalist nation. The fact that the United States is one of the most capitalist nations on the planet does not imply that it is fully capitalist. Belief in this myth is widespread on the left; after all, it allows them to promote various statist programs and then simply blame the issues caused by the programs’ inevitable failures on capitalism. This myth is also commonly accepted on the right, and is exhibited most clearly in the talking points of mainstream conservatives, who like to call the United States capitalist but cannot even define the term. The falsity of this myth is implicitly recognized by many conservatives when they make such statements as “The country has been ruined by X.” But when they go on to defend every aspect of the United States, they seem to return to the belief that their nation is nearly perfect.

The second misunderstanding is the failure of TBL conservatives to recognize the distinction between natural law, which derives from man’s nature and upholds his inherent notion of justice, and positive law, which is legislated and enforced by the state.4 Natural law is discovered; positive law is imposed. This explains why many conservatives will simultaneously raise TBL and Gadsden flags and see no contradiction. Police, as agents of the state, are enforcers of positive law. But if there is no distinction between positive law and natural law, then any law enforced by the police is just, and the police become the embodiment of justice. On the other hand, libertarians contend the state commits numerous and severe violations of natural law, and that it is the very institutionalization of injustice.

Due to these two misunderstandings, both the Left and the Right have mistakenly associated capitalism and private property rights with the police. Both sides see the police as the enforcers of the capitalist order; if police were abolished, the country would supposedly be chaotically overrun by socialists and criminals.5 This idea accounts for the failure of the Left to ask, “Who will enforce redistribution of wealth?,” and for the Right to ask, “Who will enforce gun control laws?” The police are the answer to both questions, and recognition of this should impel each group to reconsider its stance on the police. The police are not enforcers of natural law or private property rights, but of positive law and the edicts of the state. They will act in accordance with the incentive structure created by a state-run monopoly. Even when local police happen to resist federal edicts, it is only because the state or local governments have created a stronger incentive in the opposite direction, not because they are inherently enforcers of justice. If TBL conservatives can see this, they may reconsider their unquestioning faith in the agents of the state.

We now must ask who is the greater enemy of the free and just society: those who claim to uphold liberty and private property rights yet fail to see the role of the police in suppressing those values, or those who reject private property in the first place? I contend that the first group is more aligned with libertarianism. While there is surface-level agreement between libertarianism and leftism on the issue of police, this is not based on shared theoretical foundations but on two less profound misunderstandings. The contradictions in the TBL conservatives’ position should be pointed out, and hopefully will impel some of them to reconsider their views. However, we must recognize that, on the broad spectrum of political ideologies, American conservatives are closer to libertarians than it might appear, while leftists, who hate our very civilization and values, are becoming irredeemably distant.

  • 1. Some even threw their support behind the Black Lives Matter movement and its slogans. For example, see the Twitter post of 2020 Libertarian presidential candidate Jo Jorgensen, who wrote, “It is not enough to be passively not racist, we must be actively anti-racist.” Interestingly, these are the words of Ibram X. Kendi, a man who calls for a “department of antiracism” to be created in the United States government which will deem racist anything which produces “discrepancies,” i.e., any result other than complete equality of outcomes, while recommending measures to enforce such total equality. See also the Twitter post of the official Libertarian Party, which wrote, “Remember Michael Brown.” Michael Brown is the man who was said to have been shot while his hands were up, prompting the popularization of the phrase “Hands up, don’t shoot.” It was later shown that this was false; Brown assaulted the officer, attempted to take his firearm, and never had his hands up.
  • 2. See Murray N. Rothbard, “Justice and Property Rights,” in Egalitarianism as a Revolt against Nature, 2d ed. (Auburn, AL: Ludwig von Mises Institute, 2000), pp. 89–114.
  • 3. These are the words of Nikole-Hannah Jones, popular leftist author and creator of the infamous 1619 Project, who said, “Destroying property, which can be replaced, is not violence. To use the same language to describe those two things… I think it’s really not moral to do that.”
  • 4. See Murray N. Rothbard, The Ethics of Liberty, 2d ed. (New York: New York University Press, 1998), chap. 3.
  • 5. See the mission statement of the Thin Blue Line Foundation, which claims, “The Thin Blue Line represents the men and women of law enforcement that stand between good and evil, order and chaos. The black stripe above the blue line represents the law abiding community and the bottom black stripe below the blue line represents the criminals who want to cause destruction and chaos.”
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Government Schooling vs. The Family

09/08/2021Peyton Gouzien

Supporters of the state often point to the idea that the "state is the oldest institution in human history" as a defense of the state’s existence. This is an insanely false claim debunked expertly by the Institute’s own Ryan McMaken at this year’s Mises University. The actual oldest institution in human history is the family unit. Even Neanderthals, the biological evolutionary predecessors to Humans, who lacked the complex civilization of us homo sapiens, had family units that were critical to their survival as a species. Even other apes that exist today, such as chimpanzees, have family units comparable to our own.

The family is an important part of the survival of humans and even remains a crucial part of human survival today. From the day we are born our parents, whether biological or adopted, are our caretakers and the primary influencers of our moral principles and outlook on life. This is the role they take on and their service to children as the main authority for guidance, punishment, and catalyst for success.

At least this is how it is meant to be in the natural world. With the advent of the modern state, the natural order has been upset by the appropriation of the purpose of parents. Thanks to the state’s alliance with the intellectual and academic class, as described by Murray Rothbard in Anatomy of the State, this is made possible as “intellectual” arguments are made for the state and taught to the public.

This alliance’s effects are seen through the public education system’s widespread and encroaching takeover of the narrative in the battle for the minds of our children through their pro-state narratives on history, economics, and politics. Our children are increasingly raised and taught by those outside the family unit. Kids, on average, start primary school as early as 6, but with the popularity of pre-School, the introduction of the state’s narrative is starting as early as 3 years old.

Children have begun spending more and more time in government schools than at home, interacting with their parents less and less. This has caused teachers and school staff, not parents, to become the ones instilling values and beliefs in children. Do you think any of those would be towards questioning or even opposing the state?

This trend is not only troublesome towards combating the state but the actual success of our children. Even academic literature admits that parents play a crucial role as children’s primary educators and catalysts for success. It is no wonder that our educational output has been getting worse as the state has grown as a part of children’s lives.

Yet state-funded education continues to move further and further towards policies that cut parents out of the picture. Contrary to Public Education advocates narrative, Education spending by the federal, state, and local governments has been increasing according to the numbers they provide on the issue. As previously established despite the constant increases in spending educational output still has been getting worse. This is exactly because the expansion of the Education system is not actually about facilitating success for students but further subverting the role of the family and further implanting the idea that the state is necessary and good in the minds of the public.

The greatest evidence for such lies in the emphasis placed on secondary education. More people than ever are attending college now, with attendance rates increasing every year despite continual price increases. Many educators will push this as the “only option” or the “only good option,” even integrating it into the curriculum through Senior college essays and other programs. The reality is that they are wrong about it being “the only option” as several others exist, such as trade jobs that can often yield higher incomes than jobs out of a college degree.

The system itself can be supplanted by putting students directly into the jobs of the desired career as Economist Bryan Caplan explains in his book The Case Against Education: Why the Education System is a Waste of Time and Money. He establishes that the main purpose of all schooling, especially Secondary Education, is to prepare individuals to be good employees by creating a signaling device, a degree, that says that person shows up, does what they are told, and shows some level of competence. What Caplan points out though is that jobs themselves are signaling devices that show this and are more efficient by actually creating goods and services and giving career-specific knowledge rather than generalities and theoretical ideas.

This inefficiency is not one of incompetency, but a purposeful one that directs the public away from private institutions, such as the family, to state institutions to do as Rothbard described “make the arguments for the state’s existence”. This is something that could not be accomplished if the family was not subverted from early on by funneling children into what can only be described as an “educational prison” that the intellectual and academic class use to disseminate pro-state arguments that make them valuable to the state.

This is the reality of the bloated education system which encourages dependence on the state. Something it has had immense success in as expansions of government authority has become increasingly popular among younger people in the form of socialism or progressivism. A purposeful tactic that is no better seen than a perfect representative of the state and Intellectual class’s relationship in Karl Marx who wrote on the need to “abolish the family” and how the state “did the job for them.” and is doing as we speak.

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What’s a Few Trillion Towards Afghanistan?

09/06/2021Robert Aro

What does a few trillion dollars get you these days in war efforts and reconstruction projects? Unfortunately not much, according to the Office of the Special Inspector General for Afghanistan Reconstruction (SIGAR). In the recently published report, What We Need to Learn: Lessons from Twenty Years of Afghanistan Reconstruction, the numbers are abysmal. Starting with the largest:

U.S. efforts in Afghanistan, Iraq, and Pakistan over the last two decades are estimated to be $6.4 trillion.

(The cost of Afghanistan was about one-third, estimated to be $2.3 trillion as noted by Brown University.)

The executive summary in the SIGAR report opens with the U.S Government spending:

20 years and $145 billion trying to rebuild Afghanistan, its security forces, civilian government institutions, economy, and civil society.

$145 billion was specifically for reconstruction efforts and excludes the $837 billion the Department of Defence spent on warfighting. As follows, we find strange occurrences and a recurring theme of capital destruction. The list is long. But here are some noteworthy causes:

$9 billion on counternarcotics efforts since 2002, in part due to concerns that narcotics trafficking funded Taliban activities. Despite the investment, the cultivation of opium poppy in Afghanistan has trended upward for two decades…

Incredible how the war on drugs extends beyond America’s borders in a major way. It’s fair to say that no one would dare make the argument that if the narcotics budget was only slightly larger the war on Afghanistan’s drug production would have been won.

When imposing a system of western courts, the government failed remarkably:

$1 billion on rule of law programming in Afghanistan, with approximately 90 percent of that funding going toward the development of a formal legal system. That system, however, was foreign to most Afghans, who favored informal, community-level traditional dispute resolution mechanisms, where an estimated 80 to 90 percent of civil disputes have always been handled.

This is both sad and ironic as the US still has the highest incarceration rate in the world.

As for infrastructure projects:

In 2021, SIGAR audited a sample of 60 U.S. infrastructure projects in Afghanistan, and it found that $723.8 million, or 91 percent, had gone toward assets that were unused or abandoned, were not used as intended, had deteriorated, were destroyed, or some combination of the above.

And what may very well be the biggest, and unintentional, universal basic income experiment of all time:

$300 million a year was spent paying salaries to nonexistent personnel in the Afghan security forces.

The report is quite lengthy and details other government missteps such as the duplicate ordering of $195.2 million of cargo trucks or $488 million to support a mining sector, which appears non-existent at the moment.

For all these government investments, the country is not left with much to show for it. As Reuters recently reported, due to the recent events in Afghanistan:

Apart from illegal narcotics, the country has no significant exports to generate revenue, and aid, which accounted for more than 40% of economic output, has abruptly disappeared.

There is a shock effect of reading about government waste, seeing figures so large one can hardly fathom beyond a stat; however, the lesson here is to always follow the money.

All this money came from somewhere. Sure, some may be taxpayer funded. But debt funding cannot be overlooked. Specifically, if the Fed was barred from owning $5.4 trillion of US treasuries, who would pay for these doomed-to-fail projects?

At least for a few trillion dollars, a government backed bridge to nowhere would give us a place to drive, whereas this war effort constitutes nothing more than a fleeting moment in American history. All that remains becomes a monument, at best, to commemorate the dead.  Such is the society in which we’ve found ourselves, with us the majority (who don’t need them) versus them (the minority in power who always need us). Not one person will be held accountable for these atrocities; only worse, we’ll build presidential libraries in their names or give them tenure at prestigious universities for never speaking up against the known dangers of central banking.

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Small Businesses Are not the Key to Economic Growth

09/02/2021Lipton Matthews

Small businesses are usually touted as the driving force behind economic growth in modern societies. Throughout the world, politicians earnestly argue that small businesses are the backbone of the economy. In America, there is even an administration dedicated to building the capabilities of small businesses known as the “Small Business Administration.” The SBA oversees a dazzling suite of services to small businesses and is strangely insulated from criticisms.

Republicans and libertarian commentators in the media have upbraided the EXIM Bank for fostering crony capitalism. Generally, right-leaning economists scrutinize subsidies and special privileges, but despite the benefits accrued to small businesses – they remain a venerated symbol of American capitalism. Few seriously question their impact on economic growth or contribution to innovation. Instead, it is automatically assumed that small businesses generate prosperity.

But how did America’s fascination with small businesses emerge? According to historian Benjamin C Waterhouse the perception that small businesses hold the keys to economic dynamism is fairly recent. Waterhouse posits that the influential position occupied by small businesses in America, coincided with the election of Jimmy Carter who by situating himself as the first “small business owner” in the white house since Harry Truman infused lobbyists with energy.

Small businesses were also given a major boost when the findings of economist David Birch submitted that they were responsible for 80% of all new employment opportunities during 1968-1996. Although Birch recanted by admitting that the figure is dubious this statistic is frequently adduced to justify support for small businesses. Luckily, today there are ample studies guiding analysts to properly dissect the efficacy of small businesses.

Based on the data furnished by researchers it is evident that the importance of small businesses has been greatly embellished. For instance, innovation charity NESTA reported that during 2002-2008 in the United Kingdom, six percent of high-growth firms generated half of employment growth. Moreover, in their piece featured in the Harvard Business Review of Tuesday, February 3, 2014, Isenberg and Ross assert: “The literature consistently shows that a very small number, from one percent to six percent, or so, of all ventures in a region account for the lion’s share of net job creation and spill overs from entrepreneurship. However, increasing the number of start-ups has not increased the number of high-growth ventures.”

In fact, it appears that the reverse is true: small businesses are adept at making jobs redundant, since by the end of a decade 30 percent of small businesses remain viable. With such a dramatic failure rate the view that small businesses are initiators of jobs is indeed untenable. Similarly, libertarians may challenge Mariano Mazzucato’s theory that the state is necessary for innovation, but at least she is accurate in her summation of small businesses. Writing for the Economist she enunciates a clear case against prioritizing small businesses in Britain: “Once you take into account the number of SME jobs lost after the first three years of their creation, there is very little net job creation by these firms. Only 1% of new enterprises have sales of more than £ 1million six years after they start.”

On closer inspection, these findings are unsurprising because entrepreneurs are unequal in potential. Opportunity-driven entrepreneurs, on average, are more educated and often start businesses to capitalize on new challenges, whereas necessity-driven entrepreneurship is motivated by economic needs and typical of low-growth economies. Specifically, Robert Atkinson, the founder and President of the Innovation and Technology Innovation Foundation revealed to this writer in an interview that the typical small business owner rarely intends to form the next superstar, in essence, he is running a lifestyle business with little aptitude for expansion.

Economic literature also suggests that since firm productivity is associated with firm age, then on average, newer firms are less efficient in the management of resources. Economist Scott Shane in a seminal paper informs readers that high rates of new business formation are indicative of economic sluggishness: “As countries become wealthier the rate at which they create start-ups goes down. Societal wealth leads average wages to go up, which encourages business owners to use machines to replace work that used to be done by hand. As a result, the increased use of capital leads companies to grow in size and hire people who would have otherwise gone into business for themselves.”

Compared to large corporations small businesses are inept at ameliorating the conditions of workers as analysts based at ITIF points out in a recent report:

  • Workers in firms with more than 500 employees earn 38 percent more than workers in firms with less than 100.
  • Stores with 500 plus employees pay high school educated workers 26 percent more than stores with fewer than 10 employees, and they pay workers with some college education 36 percent more.
  • In 2012, workers in goods-producing industries were injured 25 percent less frequently in firms with more than 1,000 employees than they were in firms with 10- 49 employees.

Big firms even offer more lucrative benefits:

  • Workers in companies with more than 500 employees receive 85 percent more overtime and bonuses, 2.5 times more paid leave and insurance and 3.9 times more retirement benefits than workers in companies with fewer than 100 employees.

Large firms are resourced to provide an incredible array of benefits due to superior productivity:

  • The four largest firms in any industry have an average 37 percent higher productivity and 17 percent higher wages for production workers.

Meanwhile the notion that Americans would be better off if the economy was dominated by small businesses is refuted by data:

  • If the United States had the same firm size distribution as Europe which has more small firms then average annual income in America would be $5,200 lower. Shrinking the size of large firms in the United States to match Canada’s firm structure, would decrease U.S. per capita GDP by 3.4 percent.

In short, small businesses are not the pillar of the economy and neither is their performance superior to large corporations. Although the bureaucracy designed to enrich small businesses appears untouchable, the evidence presented should convince us that welfare for small businesses is unwarranted and must be gutted. Research foundations and private incubators can fill the gap created by the exit of government welfare. Funding unsustainable businesses is too costly for taxpayers.

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The Fed’s Exit Strategy (in 2009)

08/31/2021Robert Aro

Over a decade ago, on July 21, 2009, then Federal Reserve Chair Ben Bernanke wrote an article in the Wall Street Journal titled The Fed’s Exit Strategy. His words are all too familiar, starting with his opening sentences:

The depth and breadth of the global recession has required a highly accommodative monetary policy. Since the onset of the financial crisis nearly two years ago, the Federal Reserve has reduced the interest-rate target for overnight lending between banks (the federal-funds rate) nearly to zero. 

He follows with:

We have also greatly expanded the size of the Fed’s balance sheet through purchases of longer-term securities and through targeted lending programs aimed at restarting the flow of credit.

On July 28, 2021, as if continuing where Bernanke left off, current Fed Chair Jerome Powell explains many years later:

These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses.

In instances of a national housing crisis or global pandemic, money is supposedly injected into the system to prevent catastrophe. The flow of credit must have been so bad it required the Fed’s balance sheet to reach $2 trillion in July of 2009. It continued to expand ever so steadily, where it now sits at $8.3 trillion.

So, what happened to the Fed’s exit strategy?

In his letter, Bernanke wrote:

At some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road.

Given the tremendous expansion in asset purchases since 2009, it’s difficult to know when exactly the exit strategy commenced.

See the Fed’s balance sheet below:

According to Bernanke, the Fed devotes:

…considerable time to issues relating to an exit strategy. We are confident we have the necessary tools to withdraw policy accommodation, when that becomes appropriate, in a smooth and timely manner.

Sadly, like pulling troops out of a foreign nation, withdrawal is something which never comes easily.

He offers several ideas on how the Fed can be less accommodative, such as paying interest to banks on reserves held at the Fed or offering reverse repos, whereby the Fed sells a security to a bank with the promise to buy back the same security at a higher price. Per Bernanke, providing risk-free profits to wealthy intuitions will raise short-term interest rates and:

...limit the growth of broad measures of money and credit, thereby tightening monetary policy.

Unfortunately, the average person cannot access the Fed’s easy money programs, yet the average person is forced to accept these programs may create an “inflation problem." Beyond perusing an old speech, wondering how society got here, Bernanke’s speech serves as a reminder that there really is no such thing as a Fed Exit Strategy.

In the realm of possibility, the Fed could one day dramatically reduce its balance sheet, no longer looking to control rates no matter the cost. However, nothing indicates this would be done voluntarily. Whether Bernanke, Powell, or the Chair who follows, no matter what the Fed says about tapering, tightening or tinkering with interest rates, they will never lift their foot from the gas pedal.

The Fed sets the rules to a game we all must partake in (as long as we use their dollars), therefore they have no incentive to ever stop playing. They have no desire to slow down the money creation scheme beyond a mild transient period. Raising rates is off the table, maybe even indefinitely. It follows, they will continue using Fedspeak to make excuses, justifying their interventions and trying their best to keep the general population unaware that this monetary experiment will not end well. 

Some of us may want a truly free market, but those with the most power and influence appear to be in no rush of finding this anytime soon. Price discovery will have to wait for another day…

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Dr. Robert Murphy on the Jordan Peterson Podcast

08/31/2021Tho Bishop

Over the last several years, as Jordan Peterson rose to international fame, many thoughtful individuals in the Mises Institute orbit have voiced an appreciation for how Peterson's work may complement the Austrian tradition. Some have written on the topic, including Jonathan Newman who noted in 2018:

Jordan Peterson is not famous for his action framework, but it is central to his Maps of Meaning book and university course. He uses it on his way to demonstrating the basis for belief systems and the superiority of a morality based on the inherent value of the individual.

The differences between his action framework and that of Mises and Rothbard may be attributed to the difference between psychology and economics. But the similarities are striking, even though, to my knowledge, Peterson has not read Mises or Rothbard.

Earlier this year, Jordan Peterson began tweeting about an interest in Austrian economics, asking for suggestions for potential guests. 

Thankfully one name, in particular, got the attention of Dr. Peterson, Bob Murphy. Not only has Dr. Murphy long demonstrated himself to be one of the best educators of the Austrian tradition, but he has long been familiar with Peterson's own work. His excellent book Choice Cooperation Enterprise and Human Action also offers a great introduction to Misesian thought for a new audience.

In his most recent podcast, Jordan Peterson published his interview with Dr. Murphy, offering his audience a deep dive into the Misesian tradition. 

As Dr. Peterson begins his show, "I wanted to talk to you because I wanted a two-hour lecture in Austrian economics." 

Video can be found on YouTube. The podcast format is not currently published on his official website, can be found on most podcast platforms, such as Spotify.

Is Property Theft? | Dr Robert Murphy | The Jordan B. Peterson Podcast - S4: E43

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