What’s a Few Trillion Towards Afghanistan?

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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The Makings of a Fed Chair

09/17/2021Robert Aro

The speculation of whether Biden will reappoint Powell has been gaining media attention, as Powell’s term expires in February of next year. A few peculiarities stand out, as reported by the New York Times when they asked:

Should he reappoint Jerome Powell to lead the Federal Reserve when Mr. Powell’s term ends early next year, or select a replacement who is more fully aligned with the Democratic policy agenda?

But what about Fed independence?

We’ve long been told the Fed acts independently, ensuring the President and his cabinet does not control the nation’s fiscal and monetary policies. This reads as though the Fed should properly align itself to carry out the bidding of the ruling party.

It gets stranger! Earlier this week, two Democrat Senators, John Dodd and Barney Frank urged Biden to reappoint Powell for a second term. Reuters reports that the Senators believe:

Powell's approach to monetary policy - downplaying the risk of inflation in favor of encouraging stronger employment gains - would help Biden achieve his broader economic goals.

Any notion of appointing a Fed chair to help Biden achieve his goals flies in the face of Fed independence and raises alarms as to the state of monetary policy in America. The exact quote, as written in The Hill, sounds more bizarre. When referring to Powell, the Senators wrote:

His denial that excessive inflation is either imminent or inevitable given current Fed policy comes from a Trump appointee (as chair, although not initially as a governor) not previously known as a liberal and/or a subscriber to the “deficits don’t matter” school. 

Powell, who apparently downplayed the increase in prices, really impressed the Senators. They effectively approve of the Fed misleading the public, and clearly… debt doesn’t matter.

The Senators followed with:

Immediately, for moderate Democrats, Powell offers both a much bigger shield against conservative accusations of fiscal irresponsibility than the same actions coming from a newly appointed liberal. 

Providing three additional reasons why Powell makes for a good chair:

First, these were not major attacks on the legislation, and nothing in Powell’s performance contradicts his assertion that he supports the basic framework we put in place.

The Fed chair is supposed to be responsible for monetary policy. This should have nothing to do with any framework the ruling political party has in place.

Second… it is wholly implausible that Powell would initiate controversial deregulatory steps while he continues to focus on the economy.

This only becomes admirable if one is of the mindset that deregulation is bad or that it would cause too much of a headache if politicians were forced to go through any deregulation proceedings. The Senators concluded that:

Finally, as to climate change: Nothing a Fed led by a liberal Biden replacement could do on its own would be nearly as important in dealing with this issue as the substantive provisions in the legislative package that the reappointment of Powell would facilitate.

While somewhat childish, they’re argument is that it’s better for a Republican to tackle climate change through the Federal Reserve than a Democrat.

Again, it just seems all so strange. An unapologetic endorsement for Powell comes not on the basis of virtue, economic acumen, or any past accomplishment; rather, his ability to make the party, for all intents and purposes, look good while playing by their rules.

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Rational Markets, Irrational Politics

“Government is that great fiction, through which everybody seeks to live at the expense of everyone else.”

~ Frederic Bastiat

If everyone was irrational all of the time we would be in big trouble. You’d never know when someone was suddenly going to swerve off the road for no apparent reason and drive into a building, or start babbling to you in tongues over the phone when all you wanted to do was order a pizza.

(I will define, for our purposes, rational as: having and acting upon beliefs that are in accordance with reality.)1

That being said – people are irrational enough of the time, that behavioral economists are never done telling us that they are not suitable for a market economy and need regulations to “nudge” them in the right direction. They illustrate the point with examples such as the fact that if you want to motivate someone to run you are better off giving them $105 dollars a week and fining them $15 a day every day they don’t run, than rewarding them with $15 a day every day they do run — even though these things essentially amount to the same thing. So, naturally, we need policymakers to save us from ourselves and make us do the right thing. The irony of this position is that it presupposes that people are rational enough to respond to the incentives the behavioral economists want to mete out to them. Meanwhile, entrepreneurs have been going more to devise apps that interphase with human psychology and help them adopt better habits than governments ever have! After all, it was the market that gave us Fitbit, mindfulness apps, nicotine gum, calendar apps with built-in alarms to make sure we don’t forget appointments; the list goes on and is ever increasing.

The Market Rewards Rationality

Meanwhile, for the main part, the market defends us against the consequences of the irrationality of others.  If someone was irrational at all times in all respects, they could not meet the demands of life or sustain themselves, therefore they would either be dead, under the care of others, in a mental institution, or in prison. So, while no one is rational all the time, most people are apparently at least rational enough of the time to exist within a society.

The great thing about the market is, as far as we are concerned, others only need to be rational upon the basis we deal with them. My mechanic might be a raving lunatic who drives his wife up the wall (no pun intended) with his crazy theories about the flat earth and interdimensional big foot people when he is at home, but so long as he is rational when it comes to the operations of fixing my car, it need not be any concern of mine. The pizza delivery guy could have views on race that most people find abhorrent, and I would never even know so long as he delivered it on time! The architect hired to design a bridge for a new highway might be a fanatical communist who thinks all property should be publicly owned, but as long as he is rational enough to follow the laws of physics when it comes to the blueprints, the bridge won’t be built upside down and will not collapse under the weight of the vehicles crossing over it. No one is remunerated on the market for doing irrational things, for example, bringing Squid Waffles to market. No one is interested in buying or eating Squid Waffles. Therefore, they don’t exist.

Political Institutions, Unlike Markets, Reward Irrationality

Now, need I point out, that none of this is the case when it comes to the alternative to the market, which is the political process. All of a sudden everyone’s crazy, irrational views that were none of my business become very real problems to me, because they are going to entre the voting booth and try and model a society that is fashioned based upon them. Someone might even lobby for a government subsidy to open up the first ever Squid Waffles diner! Sound crazy? Well how come the government both subsidizes and taxes tobacco at the same time? This is seemingly “irrational” but it makes sense when you understand that one lobbying block wants tobacco farmers to remain in business, and another wants people to smoke less.

While people’s performance on the market is tied to their rationality, ie., the fact that their views conform to reality and therefore they can deliver the desired results, there is no such failsafe at the ballot box. In fact, as the public choice theorists have been pointing out to us, it’s rational for voters to be ignorant about abstract topics like economics, political science, sociology, statecraft and basically anything necessary to cast a good vote, because learning the facts is time consuming and costly with very few payoffs.2

Typically, when you go into the world with irrational views that affect your day-to-day life you will be met with negative consequences. If you have irrational views about eating, you will get sick; if you have irrational views about how to treat your spouse, you will have unpleasant arguments or even a divorce; if you have irrational views about how to run a business, you will soon go bankrupt. In other words – reality provides a corrective against irrational views, or at least tries to!

The dirty secret about government is that replacing the market with its “democratic” control – be it public institutions or regulations – ends up removing this corrective mechanism and encouraging irrational behavior. No one wants to suffer the negative consequences of their own irrational behavior, whether it be an illness resulting from not having taken care of their health, or having a child they can’t support, or setting up a business to sell a line of products for which there is no demand. But democracy is inherently a system where people can make bad decisions and then vote to expropriate the consequences of those decisions to everyone else via the tax system. Those people who conform to reality by building products and providing services that meet the real needs of other people will essentially be punished for good behavior when the tax man comes around to expropriate their gains to pay for rent seekers and vagrants. This creates a tendency towards more costly, irrational behavior and less beneficial, rational behavior in society relative to what there would be on a free market. Over the long term, everyone will be disadvantaged on the whole, including those who seemingly profit from exporting the negative economic consequences of their actions to the body politic because the society they live in will be far less prosperous.

  • 1. I note that some economists, following Ludwig von Mises, take the position that people are always rational. What they mean by that is that all human behavior is goal-directed behavior and that when someone makes a choice they are choosing what they think will make them achieve that goal. (Mises: “A historian can say... In invading Poland Hitler and the Nazis made a mistake... All that another man can say about it is: I would have made a different choice.” – Theory and History) In my view that is a very specialized usage of the world rational, so I am going with the more commonly used understanding of the term. 
  • 2. See, for example, Caplan, B. (2007) “The Myth of the Rational Voter.”
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The Paradox of Anti-Utilitarianism

Most libertarians reject the utilitarianism as a moral philosophy because it would seem to grant people the right to initiate force upon one another (via the state) so long as the cause is thought to promote happiness.1 The paradox is that, while a free society does not aim at the maximization of happiness, only in a free society is the maximization of happiness possible.

Some things are obviously detrimental to overall happiness. If people in a free society choose, for example, to smoke, it is obvious that this is less utilitarian than to feed the world's poor with the cost of the carton of cigarettes - especially if the smoker has got to the point (which many do) where they no longer even enjoy smoking but just do it because they are addicted to it. If people in a free society pursue diets that lead to chronic illness later, all we can say is: “I would choose differently.”

Nonetheless, whatever one might do to regulate or stop any such “non-utilitarian” decisions would no doubt result in more misery over the long term. Take for example Prohibition in America which greatly expanded the power of the mafia. Or consider the War on Drugs which – in addition to being waged at incredible expense – has separated fathers from children and left people to rot for the crime of smoking a plant, while bringing cartels of gangsters to South America. Regulating non-utilitarian behaviors always bears a high price tag to the taxpayer which would no doubt create more happiness if it was allocated by the consumer to buying those things that they at least believe will maximize their pleasure.

In addition, when it comes to freeing the world’s poor of poverty, the massive economic growth created by the conditions of freedom far outpace the money thought to be “wasted” by truly consistent utilitarians on the caprices of the consumer. It may seem, on the face of it, “unutilitarian” that we “allow” the poor of the world to live on less than $1.90 a day while billionaires heat their outdoor swimming pools. Can’t we just tax the rich and send it to Africa? We can leave aside the point that when this has been tried the funds have invariably been wasted by dictators and central planners. Those who actually take the time to understand the market process, and how poverty has actually been eliminated in all those nations where it has, can look to the horizon and understand that it is in fact the assets of the wealthy which are destroying poverty and maximizing utility. All those billions are invested in the factories, machines and technological research which are pulling those nations which have moved from command economies to market economies out of poverty as we speak. Redistribute the money to the poor and they’ll soon be poor again, all the while destroying their employment prospects through lost wealth that could have been invested in wealth-creating industries and technology.

Allow the market to allocate resources to their most profitable ends (according to supply and demand) and companies will rush to world’s poorest nations to take advantage of cheap labor and develop sustainable infrastructure which will bring them out of poverty for good. In Bangladesh, the number of extremely poor fell from 44 to 26 million, and poverty in Cambodia has been cut in half. We see this trend all across the world. To the extent developing countries free their markets poverty falls - while those countries that hold onto autocratic control of the economy remain impoverished.

The paradox of libertarian opposition to utilitarianism is that when we resist the temptation to regulate people into pursuing happiness for a quick fix, over the long term, the market maximizes utility.

Recommended for Further Reading:

  • 1. Most notable exceptions being David Friedman, and then Mises, Hazlitt and Hume who were “rule” utilitarians, which is slightly different.
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The Opportunity Cost of Political Correctness

09/16/2021Lipton Matthews

Political correctness is the hottest topic of the season, but few pause to ponder its costs. Exposing the idiocy of political correctness manifested by the venom of cancel culture offers short-term enjoyment without bestowing intellectual insight. Readers may celebrate the trenchant critiques of identity politics penned by James Lindsay and other thinkers, and yet fail to recognize that if political correctness had not succeeded in infesting powerful institutions astute thinkers would be compelled to produce illuminating works relevant to their academic interests.

Instead of assailing the ills of political correctness, James Lindsay for instance, could be writing on mathematical theories. Of note is that in an interview with this author, Michael Rectenwald admitted that identity politics distracts scholars from pursuing more worthwhile projects. Explored from an economic angle political correctness is a classic case of the broken windows fallacy. When entertained by erudite rebukes of political correctness, readers earnestly consume their witty retorts, though remaining incapable of recognizing the unseen costs of not delivering superior literature.

There is no comparison between ridiculing cancel culture and articulating elegant theories in mathematics and philosophy. When academics compose articles excoriating the inanity of cancel culture this is time not spent exploring new frontiers in research. Ultimately, the deadweight costs of critiquing political correctness impose a negative externality on society because fewer resources are expended on communicating complex ideas to the public.

Although, readers think that the intellectual enemies of political correctness are advocating their plight – they are demonstrating false consciousness. Some intellectuals may genuinely oppose political correctness, yet many leverage the hysteria of cancel culture to rebrand themselves as dissident academics. Cancel culture is propped up by thinkers on the right because it creates a platform for some to advertise themselves as underdogs fighting the establishment.

By projecting this image of the underdog, they appear relatable to ordinary people who are inspired to endorse their platforms. Unfortunately, the average Joe is not a partner in a cerebral clash of ideas, but rather a connoisseur of cheap gimmicks. Intellectuals are aware that denouncing the evils of cancel culture, wokeness, and identity politics is becoming stale, however, attacking these villains is profitable. One can easily make a name for himself by “Owning the Left.”

Undoubtedly, rebuking Robin Diangelo is a more profitable venture for the enterprising intellectual than fashioning a new sociological theory. Hence contemporary intellectuals thrive on entertainment since ordinary people willingly reward sensational output. Therefore, cancel culture will remain a permanent fixture in Western societies because it is a lucrative business for intellectuals on the right and the left.

Right-wingers consistently rehash the horrors of cancel culture to expand their platforms and leftists employ it to reinvent themselves as diversity consultants and anti-racism professionals by arguing that the existence of cancel culture indicates that institutions require remodelling to foster equality and cultural awareness. For leftists, cancelling public figures is evidence that society is plagued by institutional racism. Even if the reasons for cancel culture are fallacious the fact that someone was cancelled is sufficient justification for the assertion that racism permeates society.

The quest for power and status also explains why leftists lobby social media entities to deplatform controversial users. By exaggerating the sins of their opponents, they manipulate others into perceiving their deeds as virtuous. And unfortunately for consumers social media companies waste time exploring hate speech policies, instead of working to enhance the user experience. However, mainstream intellectuals are not the only people benefiting from the puritanical ethos of contemporary culture. Publications, irrespective of ideology, use such stories to elicit traction from readers by articulating the details to suit narrow agendas.

But despite enjoying critiques penned by intellectuals, ordinary Joes are failing to capitalize on political correctness and could become more delusional in the process. The truth is that cancel culture is a problem in some quarters, but it is being weaponized by the left and right for financial gains. As such, they should limit consumption of this narrative since in the long term they are only wasting valuable time.

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Does the Fed Control Wages?

09/16/2021Robert Aro

Could it be said that the Federal Reserve controls wages the same way they control the prices of goods and services? According to a CNBC article on Thursday, it seems the answer is “yes.”

A less than stellar August jobs report showed:

Average hourly earnings jumped 0.6% for the month, about double what Wall Street had been expecting, and the increase from a year ago stood at a robust 4.3%, up from a 4% rise a month ago.

Strangely, these stats make news headlines when it's fair to say the general public has no appetite to hear “average hourly earnings” increased by 0.6% for the month. These headlines provide little context and the general public has no idea where these figures come from, how they were calculated, nor what they mean.

The Fed also keeps various data about wages, such as the Average Hourly Earnings of All Employees, Total Private data set, with the average hourly earnings being $30.80 per hour. Consider geographic locations like New York City, Green Bay, or Honolulu, then think about how many different types of jobs are in existence. Whether a barista, construction worker, teacher, doctor, nurse, engineer, or president of a bank, one should question the usefulness of arriving at an average wage for an entire nation. 

Nonetheless, statisticians and the Fed claim they have a way to calculate this.

The problem is how it is applied for planning purposes. According to the article:

Some voices on Wall Street expect the wage and inflation numbers to start resonating with Fed officials.

Like inflation data, it becomes concerning when wages rise too fast, requiring the Fed’s intervention in order to correct.

During Powell’s Jackson Hole address, he did say:

But if wage increases were to move materially and persistently above the levels of productivity gains and inflation, businesses would likely pass those increases on to customers, a process that could become the sort of "wage–price spiral" seen at times in the past.

While the Fed has long believed in a Deflationary Spiral, we can add a Wage-Price Spiral on the list of economic threats the Fed should monitor.

Despite not telling readers how the Fed can control wages, or elaborating on the notion of a wage-spiral, CNBC is quick to assure readers that the Fed will look at:

 …potential pressures that could trigger a wage-price spiral, which economists consider “bad” inflation.

They attempt to add further depth of analysis by quoting the Chief Economist from Moody’s Analytics who tells us: “Powell and the Fed will be content with allowing wages to rise for now.” Concluding:

But so far, they’d say the wage growth they’re observing is more a feature than a bug.

It all seems somewhat haphazardly contrived, as if these economic slogans are being made up with no firm backing or theory behind them. Calculating the average wage is problematic. Add the idea that wages could rise too much or too fast, it would trigger prices to increase, causing the wrong type of inflation; the bad as opposed to the good inflation. These are all various steps in what amounts to a very big leap of faith. The only thing worse is the conclusion that, for now, the Fed is monitoring the situation.

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The Pandemic War Analogy: Turning Natural Disaster into Violent Civil Conflict

The main reason we are seemingly so accepting of lockdowns and vaccine mandates is that we have been conditioned to view a pandemic or an epidemic as a war being waged on our society. 

In wartime we naturally expect civil liberties to be suspended. Likewise, the reasoning goes, during a pandemic we need to act in a unified way under some central command to fight this viral existential threat. Individual rights and freedoms must be curtailed for the sake of the greater good. 

But that’s a false analogy. A pandemic is not a war. It’s a natural disaster. (Granted, SARS-CoV-2 may not be so “natural,” but still, the virus is not an “enemy” waging a war on us.) 

A natural disaster doesn’t intend to subjugate cities and countryside, take natural resources and wealth, rape women, or enslave men. The virus doesn’t intend any of this. It has no intentions whatsoever. Heck, it is not even alive.

The only similarity between a war and a pandemic, then, is that oftentimes many lives are lost in both cases. I say “oftentimes” because it is actually not the case that lives are always lost during war, even if the war itself is lost. The enemy may be so powerful as to take over the country without a shot being fired. In fact, war rarely aims to kill citizens for the sake of killing. Deaths are usually the consequence of one state trying to control another. Once control is achieved, the killing usually stops. 

But not so with the virus. So far as we know, it just kills individuals mindlessly. It has neither the intention nor the capability of taking over the country or subjugating the people. Therefore, it is not a threat to the common good, only to many individual goods.

And that’s a major difference. It’s for the sake of the common good that, in wartime, we accept the sacrifice of the individual good. And, particularly if it’s a “just war,” the sacrifice is actually embraced by the individual. The hero may regret leaving behind wife and children but he is propelled to move to the front by the greater attraction of safeguarding the greater good.

Granted, human nature being what it is, wars are rarely just and individuals are rarely heroes, so the sacrifice often involves forced conscription. But still, we can have a sense of how things are supposed to be in time of a “good” war when all citizens are “good” and ready to enlist.

But a pandemic is clearly not like war. It does not bring forth the same motivations of heroic self-sacrifice and reactions of solidarity that a just war brings. If a heroic action takes place during a pandemic (and clearly such action does take place from the ranks of frontline workers) it is a self-sacrifice aimed at saving the lives of particular individuals and is therefore indistinguishable from peacetime heroic action, as when a person jumps into a torrent to save a drowning baby. It is motivated by the love of neighbor, not love of country (i.e., common good love), precisely because it is not the country nor its common good that is under threat.

This is particularly true of this covid pandemic which attacks individuals with such discrimination, generally sparing the young and healthy while slamming the old or those with metabolic or immune vulnerabilities. But discriminate destruction is, in fact, typical of natural disasters: It is the Gulf Coast, Florida, and the Eastern Seaboard that are the target of the hurricane while the earthquake shakes California; Vesuvius was fatal for Pompeii, but hardly for the rest of Campania or for Naples; the flood affects those living on the plain, not the mountain dwellers; etc. It is not the common good that is undermined by the disaster, but only many individual material properties and many individual lives. War, on the other hand, aims at controlling the whole land.

That’s why lockdowns and vaccine mandates are so wrong. They are a kind of collective action that would be justified in wartime but is applied in actual peacetime. 

And it’s easy to see the difference in effect: when the state mobilizes factories to build weapons to defend from the invasion, the good that results benefits everyone, since the threat itself is collective. But when the state shuts down restaurants and churches allegedly to save hospitals, while the Zoomocracy thrives, it has pitted one part of the nation against another, thus manufacturing winners and losers from within its own people.

And likewise with these horrendous vaccine mandates that overtly do violence to the unvaccinated who are plainly innocent of any wrongdoing. By coercing vaccination on one group to “protect” another group from the virus, state mandates treat some people as human shields for the benefit of others. Yet all are within the same commonwealth!

Our preconditioned way of thinking about pandemics in martial terms may unfortunately turn into reality. The virus may eventually recede but many common goods may not survive the response to the pandemic.

After it was announced that the administration would decree a nationwide vaccine mandate that could affect 100 million people, the Babylon Bee immediately put up a headline “Joe Biden Announces Civil War.” 

It wasn’t fake news. Unfortunately it was not satire either.

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Ethics and Compulsory Covid-19 Shots

09/10/2021David Gordon

Julie Ponesse, a philosophy professor specializing in ethics who until recently taught at the University of Western Ontario in Canada, has a moving video in which she protests the requirement at her university that she get a covid-19 vaccination in order to continue teaching. She points out that it is her absolute right to decide what substances are injected into her body, and that this should settle the question of whether the requirement is legitimate. In this case, there is also a supplementary argument to be considered. The evidence does not show the vaccine works, and there is reason to believe it has harmful effects. At the end of the video, she breaks down in tears over the prospect of being unable able to continue her twenty-one years of teaching. She was in fact fired.

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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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