Vaccine Mandates Result from the Abuse of True Science
Vaccine Mandates Result from the Abuse of True Science
There is an alarming degree of uniformity between the governments of many western countries when it comes to instituting tyrannical measures like mandatory medical injections at workplaces and vaccine passports. In doing so, they have departed from liberal values and principles, by no longer recognizing or respecting private spheres, personal goals, or individual freedom and rights. They have also ignored the fact that living in a liberal democratic society means the state is limited to a reasonable level of activity or interference that is neither detrimental nor destructive to various types of freedoms, including negative, positive, individual, subjective, and objective freedom.
At this point, it is clear that vaccine passports and mandates have nothing to do with safeguarding public health or mitigating the COVID-19 pandemic. Rather, they are purely coercive measures designed to punish disobedience by taking away one’s ability to provide for his family, shape his future, engage in activities that bring him happiness, and live his life in ways that allow him to flourish and advance his well-being. That is to say, they are effectively capable of destroying people’s dreams, goals, self-respect, self-esteem, self-development, aspirations, etc. They are also damaging for public health and the common good, as a society cannot provide a safe, secure and healthy environment for its citizens without an adequate number of people to provide key social services, including police forces, health care workers, fire fighters, sanitation workers, and teachers.
Recent data from Israel, the UK, and other nations with high vaccination rates suggest that the COVID-19 injections are of very limited effectiveness in terms of preventing the spread of the virus, and it is unclear how long any personal protection that they might provide actually lasts. In the case of Israel, the poor performance of the COVID-19 injections has resulted in a third injection being pushed on people that were previously thought to be fully vaccinated (i.e., two shots). Consequently, the Israeli Health Ministry recently reported that, in less than one year, “nearly 90% of people over the age of 60 had their third shot, compared with around 70% of people ages 40-49 and fewer than 50% of people ages 20-29.” Israel managed to achieve such high inoculation rates for third doses despite the fact that Moderna and Pfizer-BioNTech are still in the process of conducting or setting up clinical trials to test the effects of COVID-19 booster shots on people.
The COVID-19 injections did not follow the proper evaluation and approval processes for creating an effective vaccine, which typically takes between 10 to 15 years. Nonetheless, anyone that has dared to question the unknown future risks of these new vaccines, criticize vaccine passports and mandates, or point out inconvenient details like the fact that fully vaccinated people can still get infected and transmit the virus to others, has been publicly shamed and labelled as “unscientific,” “anti-vaxxer,” “selfish,” and “conspiracy theorists.” No one has been spared from the attacks of vaccine zealots, including professors, politicians, scientists, lawyers, nurses and doctors. Essentially, divergent views, ideas, approaches and perspectives, which are crucial for the progress and evolution of science, have been ridiculed or strongly rejected in the mainstream narrative. In fact, this has been true of virtually anyone that supports informed choice over obedience, and freedom over submission.
Totalitarian governments of the pandemic, unelected health experts and biased news reporters have been incessantly glorifying the vaccine mandates, often with religious undertones. In the United States, this has led to the emergence of a “false prophet” in the form of Dr. Anthony Fauci, whose dictates are widely treated with a deference that resembles a “divine pattern” by devoted adherents in a number of countries. Unfortunately, the faithful followers of this “false prophet” fail to understand that “prophecies are entirely beyond the scope of scientific method.”1 They also might not realize that science is concerned with objective facts and true images of the real world, while simultaneously opposing fear, hate, subjective opinions, coercion, faith and revelation. In fact, adherents of true scientific approaches renounce faith, revelation, and divine patterns on the basis that science explores the unknown “to establish what is,” rather than to “dictate what ought to be and what ends people should aim at.”2 They are of the opinion that “no science can tell anyone what one wants, what one should uphold, what one should grind into the dust.”3 Accordingly, any true scientist would regard vaccine mandates as wholly unscientific.
The development of science throughout history has frequently featured significant disagreements between scientists on a wide range of issues, including concepts, priorities, principles, methodologies, procedures, points of view, explanations, theories, assumptions, approaches, and goals. Such disagreements and doubts have often led to the refutation and abandonment of theories, assumptions, principles, methods, and goals in favor of new ones that emerged. Ultimately, this process has resulted in the expansion of knowledge and realization of progress. That means, in science, progress and “advances consist in finding out” where people had been wrong.4
True scientists are fully aware of what they do not know, and are prone to exercising caution until they acquire more knowledge. They do not hide information and empirical evidence in order to defend certain ideas, or specific products. On the contrary, they would be more than happy “to prove” that their “anticipations were false” and overthrow them.5 It is not the “possession of knowledge, of irrefutable truth, that makes the man of science, but his persistent and recklessly critical quest for truth.”6 True scientists would avoid “rash and premature prejudices” and developments.7 Meanwhile, the treatment of the COVID-19 injections by Dr. Fauci and his followers could be described as idolization, which halts the road to scientific progress. In fact, this sort of idolization is an abuse of science, in that it is the “wrong view of science” that “betrays itself in the craving to be right.”8 Many current western political leaders support the tyranny of abused science, which has played a crucial role in justifying their recently acquired totalitarian powers.
It would appear that the tyrannical leaders of the pandemic and their anointed “false prophets” regard the masses with disdain, believing that they do not possess intelligence or the ability to think critically. Much like “the eugenicists” that came before them, the current crop of unfit tyrannical rulers and “false prophets” have managed to “delude themselves in assuming that they themselves will be called to decide what qualities are to be conserved in the human stock. They are too dull to take into account the possibility that other people might make the choice according to their own value judgments.”9 They have not only concluded that people do not know what is best for themselves, their actions are destroying the progress made over the course of the entire history of Occidental civilization by eliminating various guarantees and protections of freedom, including the constitutions or charters of rights of individual countries, international laws and agreements like the Nuremberg Code, the Declaration of Helsinki, and the Universal Declaration of Human Rights, and the labor protections established and defended by trade unions.
People should be weary of the “false prophets” and totalitarian governments of the pandemic, as the “return to the closed society which they advocate is the return to the cage, and to the beasts.”10 Instead of unquestioningly accepting the fictitious oracles of these “false prophets,” individuals should find ways to once again become the makers of their own fates, if they are to breathe and think freely. Prior to the normalization of the present environment of fear, hate, discrimination and division, it would have been unimaginable that the leader of any western country would attempt to suspend so many types of freedom and mandate medical procedures for the entire population, essentially transforming the country into a laboratory. Doing so would have run the risk of landing them in a prison or an insane asylum. The mere existence of this type authority proves that “the forces which generated” Fascism and Nazism are not “dead.”11 Moreover, everybody around the world needs to be cognizant of the fact that if such a ruling party ever managed to gain the full backing of the police and military forces, then “the glorification of violence,” or the violent oppression and liquidation of dissenters, which characterized “the policy of Russian Sovietism, of Italian Fascism and of German Nazism” will become inescapable.12 Accordingly, it might be fitting that any politician who advocates for the destructive, uncivilized, and inhuman policies associated with totalitarian regimes might be called a Bolshevist, Nazi or “fascist psychopath.”
- 1. Karl Popper, The Open Society and Its Enemies. (1945: repr. London: Routledge, 2002).
- 2. Ludwig von Mises, Socialism: An Economic and Sociological Analysis, trans. J. Kahane (New Haven, CT: Yale University Press, 1962), p. 539.
- 3. Joseph Schumpeter, ‘Gustav von Schmoller and the Problems of Today.’ (1926; repr. Journal of Contextual Economics 138: 261 – 304. Berlin: Duncker & Humblot), p. 263.
- 4. F.A. Hayek, The Constitution of Liberty, ed. Ronald Hamowy, vol. 17 of The Complete Works of F.A. Hayek (1960; repr. Chicago: University of Chicago Press, 2011).
- 5. Karl Popper. The Logic of Scientific Discovery. (1935; repr. London: Routledge, 1992), p.278-279.
- 6. Popper, The Logic of Scientific Discovery, p.281.
- 7. Popper, The Logic of Scientific Discovery, p.278-279.
- 8. Popper, The Logic of Scientific Discovery, p.281.
- 9. Mises, Socialism, p. 582.
- 10. Popper, The Open Society and Its Enemies.
- 11. Mises, Socialism, p. 578.
- 12. Mises, Socialism, p. 480, 572.
DC Seeks to Destroy Those Who Say the Obvious: America’s Fiscal Crisis is Here
America’s debt clock has ticked past $33 trillion, reaching a billion dollars of spending every hour. Meanwhile, the monetary policy conditions that have emboldened Washington’s spending spree are over. Current estimates predict a $2 trillion deficit for 2023, while the Federal Reserve’s rising interest rates are quickly forcing payments on that debt to become the highest budget item for the federal government.
America’s fiscal crisis is here.
Unsurprisingly few in Congress, of course, have an interest in recognizing the monster they have created.
Right now, the crisis in Washington is not the economic reality federal spending has created, but the small handful of legislators trying to disrupt the process that has created these conditions. To read Beltway-based publications, the real threat is a government shutdown, eroding support for yet another round of Ukrainian funding, and “far right” legislators seeking to return to a normal appropriations process.
The face of the opposition is Florida Congressman Matt Gaetz, who has made himself one of the most hated men in Washington as a result of his unrelenting criticism of Republican leadership, his entrenched opposition to budget-by-continuing resolution that has become the norm, and his made-for-clip sharing charisma that allows him to effectively communicate the corruption, hypocrisy, and relative dysfunction of the current political elite.
Gaetz, who helped spearhead the historic coronation of Speaker of the House Kevin McCarthy, has managed to build up enough of a coalition of his colleagues to stymie recent attempts to kick the can down the road. His stated goal is to force McCarthy to honor the promises made to the GOP caucus earlier this year, to force the House to vote on twelve single-issue spending bills — as required by the Budget Control Act of 1974 — rather than the bundled-together appropriation bills that have become the DC norm since the 1990s.
The reality is that any return to legislative normality is a threat to modern Washington. Most of Congress has no interest in vetting appropriations bills, as illustrated by the backlash Rep. Thomas Massie faced by standing in the way of allowing a voice vote to authorize $2 trillion covid-related spending bills. The role of a modern member of Congress is to fundraise and beat the market on stock trades, allowing the professional political class embedded in government bureaucracies to do the real governing.
In an all-too-perfect illustration of this dynamic, last Friday the Republican Appropriations Chair Kay Granger left a Congressional meeting dedicated to the upcoming spending battles early to attend a fundraiser with lobbyists for her political committee.
While the Gaetz-led coalition’s battle for restoring normality to the appropriations process is commendable, it is noteworthy that it is ultimately insufficient to tackle the basic math problems DC faces. Even the highest ambitions from fiscal hawks have been to cap discretionary spending — roughly a third of federal spending — to 2022 levels, baking in the massive spendingl increases seen during the Trump presidency. Untouched are the much larger drivers of fiscal destruction, military spending, entitlements, and the aforementioned financing of the debt. Even the uni party’s dogmatic dedication to the Zelenskyy regime has made the relatively low-hanging fruit, ending future aid to Ukraine that has seen its public support collapse in recent months, a seemingly impossible political sell on Capitol Hill.
In modern Washington, any responsible voices on fiscal issues will necessarily be presented as reckless extremism. The sacred cows of the Beltway must be slaughtered. National default on debt obligations, including entitlement promises, will be required. Those brave enough to state the obvious will be ruthlessly attacked by the political class and the obedient press, just as Ron Paul was during his Congressional career.
America’s fiscal crisis has required decades of work by both political parties to create. The underlying incentives of America’s political process reward economic myths over recognizing this reality. Younger generations will continue to be made poorer thanks to the policies authorized by the older legislative body in US history. Standing up for a basic return to procedural normality is the easiest challenge facing Congress. Anyone unwilling to take that stand will only continue to fuel a Washington that is preying upon the future of its citizens.
As Ludwig von Mises understood, the destruction of a nation can only be stopped with a change in an underlying shift in the ideology leading to its destruction. This is why the Mises Institute is dedicated to telling these unpopular truths. If you support this mission, please consider making a $5 donation this week during our fall campaign.
The Responsibility of Price Stability
After not raising rates to fight inflation last week, Federal Reserve Chair Jerome Powell delivered his usual speech and Q & A. He opened with three very peculiar sentences regarding price stability, leading to a few unsettling conclusions.
He starts with:
Price stability is the responsibility of the Federal Reserve.
This statement raises concerns. First, it fails to define what price stability means. Even if Congress had assigned this responsibility to the Fed, it’s not something many would agree with if given the chance. While the approach to achieving this desired state of price stability appears quite absurd, for argument’s sake, let’s consider this statement true.
In Powell’s following sentence he inadvertently shares the dire consequences of giving this responsibility to a central bank, as explained:
Without price stability, the economy does not work for anyone.
This is a rather bold, yet hollow statement. He essentially suggests the economy cannot function without the Fed's intervention.
Examining the history of America reveals that central banking hasn't always been a requirement for prosperity and development. Looking at present-day and historical hyperinflations, it becomes evident central banking is largely culpable in a nation's currency collapse. From what we’ve seen of the Fed, there’s little reason to believe this current iteration of America's central bank is somehow different.
The Austrians have argued for over a century that a currency monopoly or central authority controlling a nation's currency is unnecessary, much like we don't need a czar to regulate the production of shoes, cars, or gold.
To state that the Fed makes the economy work for everyone is simply untrue. It’s clear how bankers who receive bailouts and capitalize off borrowing millions and low interest rates are better off; but the average person on main street who ultimately pays for this market distortion can hardly say the Fed’s policies work in their favor.
The third sentence follows a similar vein as the previous:
In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all.
This claims that a strong labor market is due to the Fed’s management of price stability. He’s taking credit for something that cannot be verified. It would be useful if, during the Q&A session, a reporter inquired as to how the Fed ascertains what a "strong" labor market is and how market intervention contributes to a stronger labor force. However, questions like this are seldom asked.
Returning to one crucial point: although Powell does not address what he means by price stability, the St. Louis Fed has an article elaborating on it…
Price stability means that inflation remains low and stable over the longer run. When inflation is low and stable, people can hold money without having to worry that high inflation will erode its purchasing power.
In addition to not utilizing the historical definition of inflation, the notion that a gradual reduction in purchasing power could ever be beneficial to society is something everyone should recognize as false.
It's also worth noting Powell’s same three sentences have been used nearly verbatim in speeches in February of this year, as well as August and November of last year. If one were the wagering type, it would be reasonable to bet these three sentences have been reiterated more than four times during Powell's tenure.
Poland Cuts Back Ukraine Aid and Says Ukraine Could Pull Poland Down with It
The Government of Poland announced this week that it is no longer providing weapons support to Ukraine, and that Warsaw will focus on building up Polish weapons stockpiles instead.
Prime Minister Mateusz Morawiecki said Wednesday, “We are no longer transferring weapons to Ukraine, because we are now arming Poland with more modern weapons.”
Warsaw's decision comes as diplomatic relations between Ukraine and Poland have worsened due to a dispute over imports of Ukrainian grain into Poland. The conflict has its roots in the fact that Russia has largely prevented Ukraine from exporting grain via its Black Sea ports. Ukraine then turned to exporting grain by land, with much of it going through Poland. Waraw, however, feared that a massive influx of Ukrainian grain in Polish markets would drastically cut incomes for Polish farmers. As in many European countries, farmers in Poland retain sizable political clout, and Warsaw moved to convince the EU to restrict Ukrainian grain sales in Eastern Europe.
Last week, however, the European Commission moved to allow Ukrainian grain sales across the bloc prompting unilateral bans on sales in Poland, Hungary, and Slovakia. Ukraine then sued all three countries in the World Trade Organization, and has accused Warsaw of "acting in Moscow's Interests."
Thus, Poland's decision to pull back its Ukraine support comes after weeks of threats from Kyiv and the ongoing trade dispute. It is unlikely, however, that Warsaw's latest move is a mere bluff designed to push back Ukraine's grain exports. There is good evidence that the Ukrainian regime is beginning to wear out its welcome with Poland. Polish president Andrzej Duda this week compared Ukraine to a drowning person who pulls down people who try to save him. Duda suggested it becomes "necessary to act" to "protect oneself from being harmed by a drowning person" who "can pull you into the depths."
Also notable is the fact that these moves from Warsaw come as election season, so comments like these can also be read as attempts to shore up support with significant voting blocs within the country.
Until recently, Poland was one of Ukraine’s strongest allies in the war. Now Polish President Andrzej Duda compares Ukraine to a desperate drowning person who can pull the rescuer down with them. pic.twitter.com/JzjiGlp5Rn
— David Sacks (@DavidSacks) September 21, 2023
The fact that Poland is slowly souring on endless largesse for Ukraine is quite a reversal from 2022 when Warsaw was one of Kyiv's most enthusiastic supporters. Indeed, as we noted here at mises.org, Polish support for Ukraine was downright reckless with Polish calls for a "no-fly zone" and a Polish scheme to ship F-16s to Ukraine in an attempt to escalate the conflict. Poland has also been a key partner to Kyiv in continuing to provide safe haven to about a million Ukrainian migrants seeking to escape conscription, war, and economic devastation in Ukraine. Poland also spent more than 8 billion euros on supporting these migrants in 2022 alone.
The slackening support for Ukraine also likely stems from the fact that more astute observers have perceived that initial predictions about the potential for a Europe-wide Russian invasion were clearly wrong. Russian tanks will obviously not be rolling through Poland or Hungary any time soon, even if NATO completely withdraws from Ukraine.
It is not a given, however, that the current ruling party in Poland will be rewarded in the upcoming elections for its softening support on Ukraine. NATO's operations in Ukraine—funded overwhelmingly by American taxpayers, of course—still has many supporters in Poland. However, if the ruling party comes out of the election unscathed following its pullback from Ukraine, this will likely be bad news for Kyiv which has already lost its summer "offensive" and continues to endure unsustainable losses. The Russians aren't giving up their control of southeast Ukraine any time soon. Moscow must retain control of the Cherson regime to keep control of irrigation waters for the Crimea, and total control over the Sea of Azov is key to ongoing plans to open up the trade routes with the Caspian Sea and the Volga River basin.
The longer Ukraine fails to make any progress in its south, the more likely other European regimes will conclude that endangering their own domestic budgets and agricultural voting bases are no longer worth the trouble.
Five Year Plans Won’t Work
The Biden Administration is celebrating the first anniversary of the passage of the Inflation Reduction Act, which allocates trillions of dollars in taxpayer subsidies to industries of their choice. Welcome to five-year plans.
While guest-lecturing in Moscow one cold March night in 1993, a student asked why western firms didn’t invest more in Russia. I had just finished my PhD Dissertation on the subject of US-Russian joint ventures, so I probably gave a long, boring answer, that ended with an observation that in Russia, it was hard to make plans. One bright student quipped, “We used to have plans. Five-year plans.” And the whole room erupted in laughter.
When I tell that story in my classes in the US, no one laughs. That’s because the Biden administration has just launched their version of “five-year plans.” They won’t work. I explain the failure of the Soviet socialist five-year plans in the classroom by asking a student who might be wearing a Patrick Mahomes Kansas City Chiefs jersey, “Will Mahomes be with the Chiefs in five years? Will they be in the Super Bowl in five years? Will they still be the Kansas City Chiefs in five years, or will they move to another city?” Students quickly get the idea that five-year plans are dumb because no one knows what jersey will be demanded in five years. Yet, five-year plans require that you make that prediction.
That statement from former House Speaker Dick Armey should be on the wall of every congressperson in DC. “The reason markets are smart is because they aggregate all the information available from every possible producer and consumer. Markets are where everyone votes. Isn’t that a good way to solve problems? Wasn’t that how the congressional representative was elected? We hear cries continually about “threats to democracy.” Well, the recent flood of money into narrowly specified industries is a threat to the democratic medium that we call the market. Why should only government elites get to vote? What’s wrong with “one person, one vote?” Because that’s what happens in a market. Here’s how economist Friedrich von Hayek explained it, "The advantage of a free market is that it allows millions of decision-makers to respond individually to freely determined prices, allocating resources - labor, capital, and human ingenuity - in a manner that can't be mimicked by a central plan, however brilliant the central planner."
When our house was built in 1999, the owner wanted to be “ahead of the curve,” so he ran three physical hard wires to every room: TV, telephone, and internet. We don’t use any of them. The investment was wasted. As the trillions of dollars in funding through the Inflation Reduction Act will be wasted. The Biden administration’s commitment to broadband, the power grid, and electric vehicles will suffer the same fate. No one knows which technology will dominate in the future.
“Predictions are difficult, especially those about the future,” quipped Danish Physicist Nils Bohr. But that doesn’t seem to slow the economic humanism that’s behind the motivation that encourages governmental bureaucrats to pick winners and losers. Speaking of those Kansas City Chiefs, would any reasonable person suggest that the government put their enormous resources behind ONE of the 32 teams in the NFL? Of course not, that would destroy the league. What do you think providing $28 billion via the Chips Act will do to the semiconductor industry?
When Milton Freidman popularized the phrase, “There is no free lunch,” he was making the point that trillions of dollars forcefully extracted from taxpayers are dollars that could have gone to other investments. Financial folks expect a return on their investment that is equal to, or above the average rate of return. Government subsidies perform well below that expected rate. Thus, every dollar that is committed to a government subsidy - on average - underperforms. That makes all of us poorer.
Solyndra is a classic example of governmental elites trying to predict the future. The solar panel manufacturer received $535 million in loan guarantees. When it failed, President Obama observed that he didn’t know which technologies would prevail. He’s right, he does not know. But the market does. The half-billion dollars that President Obama flushed down the Solyndra toilet was forcefully extracted from obedient, tax-paying citizens by the use of power. That’s why we should rely on the market.
When the market works, investors willingly contribute their own assets, by choice.
So it’s pretty simple: Would you rather have a society operated by power, or by freedom? That’s why it’s called free market capitalism. Another warning from the economist Hayek, “I regard the preservation of free markets, as an essential condition of the very survival of mankind.” Or as Whole Foods founder John Mackey said, “Capitalism is humanity’s greatest invention.” Then, government subsidies are humanity’s worst invention.
$33,000,000,000,000
Only three months ago, the US debt crossed the $32 trillion mark. Here we are again, this week passing $33 trillion, with still no end in sight. As usual, Democrats are blaming Republicans, Republicans are blaming Democrats, as the political circus in Washington perpetuates a never-ending debt ceiling crisis.
The New York Times attempts to shed light on some of the reasons behind this relentless debt growth.
The Inflation Reduction Act of 2022 was previously estimated to cost about $400 billion over a decade, but according to estimates …. it could cost more than $1 trillion thanks to strong demand for the law’s generous clean energy tax credits.
Connecting clean energy tax credits with inflation reduction remains a rather vague proposition; and trillion-dollar spending programs are notorious for blowing through budgets.
It’s bad enough the State forces taxation upon the People; but, the inability to spend within an annual multi-trillion-dollar budget only adds insult to injury.
The New York Times highlights another troubling issue:
In late 2022, the I.R.S. delayed by one year a new tax policy that would require users of digital wallets and e-commerce platforms to start reporting small transactions to the agency. The policy was projected to raise about $8 billion in additional tax revenue over a decade.
Now, picture being $33 trillion in debt while looking for new and innovative ways to tax private citizens on their crypto wallets to “raise” $8 billion over a 10-year period. It’s evident taxation alone will never sufficiently address the fiscal challenges in Washington.
Also explained:
A Treasury Department report last week showed that the deficit — the gap between what the United States spends and what it collects through taxes and other revenue — was $1.5 trillion for the first 11 months of the fiscal year, a 61 percent increase from the same period a year ago.
The feasibility of extracting an extra $1.5 trillion in annual tax revenue must be questioned. Barring significantly increasing the wealth confiscation of the masses, making up for this annual shortfall by simply taxing more will never suffice. Even if higher taxes were the solution, we shouldn't be surprised if deficits persist.
Amidst this alarming $33 trillion milestone, Treasury Secretary Janet Yellen appears unfazed by the debt level, appearing on CNBC, addressing the nation with a straight face saying:
The statistic or metric that I look at most often to judge our fiscal course is net interest as a share of GDP.
By the same logic, should the government borrow and spend $10 trillion at 1% on make-work projects, this would be okay as the trillion-dollar interest expense pales in comparison to the boost in GDP. If so, it rings true that debt doesn’t matter, so long as taking on new debt services the old debt.
The causal nature of the Federal Reserve is seldom made. But we must keep in mind that the Fed’s ability to buy government debt makes the US Government's ability to spend money it doesn’t have that much easier. It’s true the Fed does not own all the US debt. But if it weren’t for the Fed, we wouldn’t be $33 trillion in debt as it is.
Playing with Official Inflation Statistics: An Example from Germany
The Harmonized Index of Consumer Prices (HICP) consists of 12 subindices, which are weighted according to their shares in total household expenditures. If, for example, food and non-alcoholic beverages (subindex 1) account for 15% of expenditures, they should also be given a weight of 15% in the overall index. In this way, each expenditure category would be given the importance it has for an average household. This is the claim of official statistics. But here, too, as so often, aspiration and reality diverge.
In Germany, the traditionally largest subindex covers housing, water, electricity, gas and other fuels (subindex 4). It has always accounted for more than 21% of the overall index since the mid-1990s. Between 2020 and 2022, the weight had increased to slightly more than 25%. The official statistics thus assumed that German households spend on average around a quarter of their total expenditure on goods of this category. This is too little in the eyes of some critics. Many households spend significantly more on goods of this type. In larger urban areas, households often spend more than a third of their income on rent alone.
There has now been an unexpected change in 2023. The Federal Statistical Offices did not increase the weight of subindex 4, but lowered it from 25.2% in the previous year to 16.5%. No valid justification for this has yet been provided. On the website of the Federal Statistical Offices, there are only empty phrases: "The Corona pandemic, which has been prevalent since 2020, with its restrictions on public life and the resulting consequences, makes it necessary to change the usual procedure for updating the goods weights for the third year in a row as well." (translated with DeepL because AI is really good at translating bureaucratic talk.)
How could one even justify such an implausible adjustment? As a matter of fact, the adjustment means that from now on official statistics will assume that the average German household spends only 16.5% of its total expenditure on housing, water, electricity, gas and other fuels. Whether this assumption is realistic is something everyone can consider for themselves.
What is clear is that the down-weighted subindex 4 has been showing above-average inflation rates for some time now. Between 1996 and 2022, it has risen by 84% overall, but the HICP as a whole has risen by only 59%. Only subindex 2 for alcoholic beverages, tobacco and narcotics has risen even more strongly during this period, by 115%.
During the inflationary phase of last year, prices in subindex 4 rose the most of all. The inflation rate here was 13.9%, more than 5 percentage points above the official average inflation. That the Federal Statistical Offices have now decided to lower the weight of this subindex has one practical effect: the officially measured inflation will be lower. But it measures past reality.
QJAE: Publication Activity in Austrian Journals, 2011–20
Abstract: Counts of publications in the academic journals of the Austrian school of economics are used to rank scholars and institutions by research productivity in Austrian economics over the preceding decade. The journals surveyed are, alphabetically, Advances in Austrian Economics, Cosmos + Taxis, the Journal des économistes et des études humaines, the Quarterly Journal of Austrian Economics, and the Review of Austrian Economics. Ranking methodology follows the established mainstream literature but focuses on publications in journals that specialize in the Austrian school. An appraisal of the Austrian school’s progress over the past decade is provided, and implications for the future are suggested.
JLS: Are Pay Equity Policies Justified?
ABSTRACT: This article identifies the lack of policy analysis as a major research gap in pay equity policies. Applying a policy analytic approach, the article applies comparative empirical evidence to the tasks of problem structuring and policy prescription as well as to three different evaluation methods: effectiveness, cost-effectiveness, and benefit-cost analysis. The results show that pay equity policies lack fundamental justification as public policies. Implications for research and policy revision follow.
Read the full article at the Journal of Libertarian Studies.
Janet Yellen Needs to Brush Up on Her ABCT
“I am feeling very good about that prediction,” Treasury Secretary Janet Yellen told Bloomberg when asked whether the U.S. would avoid a recession while still containing inflation. “I think you’d have to say we’re on a path that looks exactly like that.”
Tell that to the 39,000 Americans who filed bankruptcy in August. That number is an 18% increase from a year ago and with unemployment now just 3.8%, imagine when more people are laid off with over $1 trillion in credit card debt outstanding.
At the same time commercial bankruptcies increased nearly 17% in August compared to July, reports Fortune.com, marking the 13th consecutive month that total bankruptcies, including families and individuals, have logged year-over-year increases, according to the American Bankruptcy Institute.
Chapter 11 filings surged 54% from the same month from a year ago. US bankruptcy courts recorded six new, large filings ($50 million +) last week alone. At least 23 big filings happened last month. The jump in business failures, especially for big firms, is clear, Ed Flynn, a consultant with ABI who studies bankruptcy statistics told Fortune. “I think a lot of it is interest rates,” said Flynn. “There have been an unusually large number of large cases.”
If that’s the case more bankruptcy filings are on the way. The September 11th treasury note auction produced the highest yield since before the great financial crisis, 4.66%.
“Treasury yields also have also been pushed higher by growth in the supply of new notes and bonds to finance the US government’s widening budget gap. The three-year tenor increased by $2 billion this month and last month,” Elizabeth Stanton reported for Bloomberg.
If Secretary Yellen was familiar with the Austrian Business Cycle Theory she’d know the ongoing increase in interest rates means the landing will not be just hard, but historic in its brutality.
Why the American Revolution Still Matters
Late last month, the administrators at a Colorado public school—with the grandiose name "the Vanguard School"—tried to force a 12-year-old boy named Jaiden to remove a Gadsden flag patch from his backpack. The Gadsden flag may be more familiar to readers as simply the rattlesnake flag with the words "don't tread on me" on it. People who are at all familiar with the American revolution know the flag is a revolutionary-era flag with a message designed to repudiate the imperial despotism imposed on the Americans by British elites.
Teachers and administrators at the Vanguard School, however, were absolutely sure the flag has "origins with slavery, and the slave trade." Of course, this is exactly the kind of historical illiteracy and social-democratic revisionism we'd expect from public school teachers and administrators. "Teaching" at your average public school is mostly about running a taxpayer-funded propaganda mill and daycare center, and has little to do with the dissemination of any factual material. Thus, it is likely that the staff at this school saw on MSNBC once that the Gadsden flag is "racist" because some American conservatives wave it. The leap from this slur to the idea that the flag is a symbol of slavery is brief indeed.
This whole narrative is part of the story pushed by the "1619 Project" at the New York Times which would have us believe that the American Revolution itself was all about racism and slavery. Meanwhile, the real themes and facts of the revolution—secession, natural rights, radical liberalism, violent revolution, and extreme decentralization—have all been swept aside to serve Progressives' current ideological projects. The regime's propagandists—which includes most public school employees—naturally seek to destroy and discredit all symbols of the American Revolution beyond bland slogans about "taxation without representation." This framing of the revolution makes it all very safe and does not encourage any opposition to the current regime. After all, we have "representation" now—the millionaire gerontocracy in Congress "represents" you, don't you know—so there's no reason to think revolution can be justified. If you don't like something, just vote harder.
This sterile pro-status-quo interpretation of the revolution is exactly what we should expect to be taught in a government school because the correct interpretation is far too dangerous and inconvenient for the regime.
The reality of the revolution, of course, is that a sizable portion of the population—from intellectual elites in cities to ordinary farmers in the countryside—grew tired of the British yoke. Animated by a radical ideology of natural rights—which we now call "classical" liberalism or libertarianism—Americans declared the established government illegitimate and seceded. It didn't have to be that way. At first the Americans had asked politely for more freedom. They even sent the Olive Branch Petition to the King. For their efforts, the Americans were declared "traitors"—that epithet so often used by despots and their useful idiots everywhere.
When the British state eventually launched a war against the Americans to prevent their secession, the Americans were forced to take up arms and killed government soldiers and officials until they packed up and left the country. The revolutionaries only wanted peace and self-determination. The British refused to let them have it. The British got their response, and got it good and hard.
It was all morally justified, of course: the secession, the rebellion, the disdain for the British idea of "law and order." Parliament and the Crown had attempted to destroy the Americans' human rights—the rights of life, liberty, and property as outlined by the libertarian Leveller revolutionaries in England a century earlier. As a result, the revolutionaries were entitled to protect their rights by using violence in self-defense.
Naturally, today's elites ignore those parts of the American Revolution. It also now appears the Progressives have moved on to the next phase which is to discredit the revolution altogether. Thus, symbols of the revolution must be denounced as symbols of slavery, and all modern rebellion and secession declared to be "treason" or "sedition" or some other political "crime." It's okay to "rebel"—i.e., in the style of Antifa or Black Lives Matters—so long as the "solution" is always more state power. Real independence, secession, and rebellion are absolutely not allowed. The 1619 Project thus assures us the whole enterprise of the American Revolution was suspect. We're told those ill-mannered Americans should have listened to their betters in the imperial metropoles of Britain!
For those who actually respect human rights, however, any attempt to craft or promote this Progressive anti-revolutionary narrative must be met with enthusiastic opposition. In the case of Jaiden at the Vanguard School, there is a happy ending. The teachers were humiliated and Jaiden's backpack remains bedecked with the Gadsden flag. It's a small victory, but a necessary one. For obvious reasons, the regime doesn't want Americans to think secession or revolution—as so well described by Thomas Jefferson—is ever an option. Ever since the counter-revolutionaries got their new centralist-nationalist constitution in 1787, the American regime has been about the maintenance and spread of federal power. The revolution, however, acts as a beacon in the opposite direction, and Rothbard has explained why:
The Americans had always been intractable, rebellious, impatient of oppression, as witness the numerous rebellions of the late seventeenth century; they also had their own individualist and libertarian heritage, their Ann Hutchinsons and Rhode Island quasi anarchists, some directly linked with the left wing of the English Revolution. Now, strengthened and guided by the developed libertarian natural rights ideology of the eighteenth century, and reacting to aggrandizement of the British imperial state in the economic, constitutional, and religious spheres, the Americans, in escalated and radicalized confrontations with Great Britain, had made and won their Revolution. By doing so, this revolution, based on the growing libertarian idea pervading enlightened opinion in Europe, itself gave immeasurable impetus to the liberal revolutionary movement throughout the Old World, for here was a living example of a liberal revolution that had taken its daring chance, against all odds and against the mightiest state in the world, and had actually succeeded. Here, indeed, was a beacon light to all the oppressed peoples of the world!