Power & Market
Back in the ancient news cycle of August 6, 2018, Alex Jones, host of The Alex Jones Show and curator of Infowars.com, was deplatformed in a coordinated effort by multiple social media and content streaming services. The list of companies, whose simultaneity was surely a coincidence, is quite impressive: Facebook, Apple, YouTube, Spotify, Vimeo, Pinterest, MailChimp, and LinkedIn. The debate on free speech versus hate speech raged on for the customary week or two as the news cycle dictated, with many libertarians and conservatives willing to leave Jones to the proverbial wolves. Perhaps Alex Jones wasn’t an attractive enough martyr for the cause. But to those who stood on principle against these social media giants, this was a sign of things to come. Editors for the Free Thought Project spoke out against such censorship on the grounds that it may only be Alex Jones today, but FTP would be next.
How right they were.
At thefreethoughtproject.com, Matt Agorist wrote, “What makes this recent purge from Facebook and Twitter so egregious is that the pages like the Free Thought Project, the Anti-Media, Press for Truth, and dozens of others, did not fit the hate speech narrative these same companies used to wipe out Alex Jones. Instead, these pages were dedicated to spreading peace, bridging the divide, bringing humanity together and holding government accountable.”
It’s true that Jones has made more than his share of controversial statements, including claiming that the Sandy Hook Elementary School shooting in 2012 was a hoax, but this kind of controversy does not follow sites such as the Free Thought Project; Facebook even admitted they were not targeted for promoting violence or spreading “fake news.”
So what were the determining factors that led to this round of deplatformings? According to a statement co-authored by Facebook’s Head of Cybersecurity Nathaniel Gleicher, the 559 pages and 251 accounts purged had, “consistently broken our rules against spam and coordinated inauthentic behavior.” The statement continues, “This inauthentic behavior consists of sensational political content, regardless of its political slant, to build an audience and drive traffic to their websites…posting in dozens of Facebook Groups, often hundreds of times in a short period, to drum up traffic for their websites.”
As Caitlin Johnstone wrote at Medium.com, Nathaniel Gleicher is also the former White House National Security Council Director of Cybersecurity Policy.
What a small world!
Is there any truth to Facebook’s claims about “inauthentic activity”? It’s easy to become instantly enraged by the censorship, considering that it appears to be punishing alternative media groups for “driving traffic to their websites.”
This hardly seems like an egregious sin. And if consistently applied, would this standard not also include major news outlets such as CNN, MSNBC, and Fox News?
Additionally, the deplatformings seem conspicuously coordinated, as a number of affected organizations found their accounts suspended all at once, one the same day, on multiple social media sites.
There is some logic to Gleicher’s explanation, but Facebook’s application of its rules has been wildly inconsistent. People rushed to share tales of the purge, showing account holder screenshots with multiple banned pages and profiles. Unfortunately, it’s the operation of so many pages and accounts by the same individuals that possibly got them caught in this little sting operation. When users were identified as sharing their clickbait in “dozens of groups, hundreds of times over a short period,” they were attempting to game the system by boosting likes and shares in an attempt to drive themselves higher in news feeds. An issue with consistency notwithstanding, this sort of activity is considered spam and inauthentic behavior by Facebook. They are hardly the first to adhere to such a policy. Reddit.com bans users who are found to operate multiple accounts in order to up-vote the submissions by their primary account.
To be clear, I am not criticizing indie media for doing everything they can to spread their message. Those of us in the liberty community will remember Congressman Ron Paul and his foreign policy warnings against “blowback,” — the CIA-coined term for the unintended retaliation for U.S. foreign interventions. But blowback is not limited to the world of foreign policy; it’s also a social phenomenon. When Facebook made drastic changes to its algorithm crippling the reach of alternative media and independent content creators, it prompted these same creators to find ways to circumvent the algorithms. This kind of “throttling” is nothing new. The Gold Standard with Alan Mosley once enjoyed a reach of over 70,000 for its updates and episodes, even without any budget for Facebook Ads. These numbers were common as recently as May, but even with the purchase of Facebook Ads, results have been catastrophically lower since June. Now The Gold Standard is fortunate to receive a quarter of the reach, even though it sports all-time highs in likes and follows.
So what will the community-at-large do in response to this latest social media purge?
Sure, there were some that rushed to defend Alex Jones, but many more decided to put their momentary e-safety far above the principle of defending free speech. But those of us who believe in the free market should put our money where our mouths are. There is more than just circumstantial evidence to suggest that many of the major media outlets are coordinated, both with each other and Big Brother, to silence dissenting voices. When you read an article, listen to a podcast, or watch a video, make sure to like/share/subscribe to the original feed in order to keep them in the public view despite the reproach of the elite. Better yet, follow these content creators to their new destinations, and prepare to unplug from outlets that don’t respect your freedom to choose what information to consume.
September marked a decade since the bursting of the housing bubble, which was followed by the stock market meltdown and the government bailout of the big banks and Wall Street. Last week’s frantic stock market sell-off indicates the failure to learn the lesson of 2008 makes another meltdown inevitable.
In 2001-2002 the Federal Reserve responded to the economic downturn caused by the bursting of the technology bubble by pumping money into the economy. This new money ended up in the housing market. This was because the so-called conservative Bush administration, like the “liberal” Clinton administration before it, was using the Community Reinvestment Act and government-sponsored enterprises Fannie Mae and Freddie Mac to make mortgages available to anyone who wanted one — regardless of income or credit history.
Banks and other lenders eagerly embraced this “ownership society”’ agenda with a “lend first, ask questions when foreclosing” policy. The result was the growth of subprime mortgages, the rush to invest in housing, and millions of Americans finding themselves in homes they could not afford.
When the housing bubble burst, the government should have let the downturn run its course in order to correct the malinvestments made during the phony, Fed-created boom. This may have caused some short-term pain, but it would have ensured the recovery would be based on a solid foundation rather than a bubble of fiat currency.
Of course Congress did exactly the opposite, bailing out Wall Street and the big banks. The Federal Reserve cut interest rates to historic lows and embarked on a desperate attempt to inflate the economy via QE 1, 2, and 3.
Low interest rates and quantitative easing have left the Fed with a dilemma. In order to avoid a return to 1970s-era inflation — or worse, it must raise interest rates and draw down its balance sheet. However, raising rates too much risks popping what financial writer Graham Summers calls the “everything bubble.”
Today credit card debt is over a trillion dollars, student loan debt is at 1.5 trillion dollars, there is a bubble in auto loans, and there is even a new housing bubble. But the biggest part of the everything bubble is the government bubble. Federal debt is over 21 trillion dollars and expanding by tens of thousands of dollars per second.
The Fed is unlikely to significantly raise interest rates because doing so would cause large increases in federal government debt interest payments. Instead, the Fed will continue making small Increases while moving slowly to unwind its balance sheet, hoping to gradually return to a “normal” monetary policy without bursting the “everything bubble.”
The Fed will be unsuccessful in keeping the everything bubble from exploding. When the bubble bursts, America will experience an economic crisis much greater than the 2008 meltdown or the Great Depression.
This crisis is rooted in the failure to learn the lessons of 2008 and of every other recession since the Fed’s creation: A secretive central bank should not be allowed to manipulate interest rates and distort economic signals regarding market conditions. Such action leads to malinvestment and an explosion of individual, business, and government debt. This may cause a temporary boom, but the boom soon will be followed by a bust. The only way this cycle can be broken without a major crisis is for Congress both to restore people’s right to use the currency of their choice and to audit and then end the Fed.
Just in time for midterms, Facebook has removed 559 pages and 251 accounts they claim have been spreading misinformation and spam. Several of the pages however - some with millions of followers, were pro-Trump conservatives who had spent years cultivating their followings.
Caitlin Johnstone explains a bit more:
Facebook has purged more dissident political media pages today, this time under the pretense of protecting its users from “inauthentic activity”. In a statement co-authored by Facebook Head of Cybersecurity Nathaniel Gleicher (who also happens to be the former White House National Security Council Director of Cybersecurity Policy), the massive social media platform explained that it has removed “559 Pages and 251 accounts that have consistently broken our rules against spam and coordinated inauthentic behavior.”
This “inauthentic behavior”, according to Facebook, consists of using “sensational political content — regardless of its political slant — to build an audience and drive traffic to their websites,” which is the same as saying they write about controversial things, and posting those political articles “in dozens of Facebook Groups, often hundreds of times in a short period, to drum up traffic for their websites.”
In other words, the pages were removed for publishing controversial political content and trying to get people to read it. Not for writing “fake news”, but for doing what they could to get legitimate indie media news stories viewed by people who might want to view it. The practice of sharing your material around in Facebook groups is common practice for most independent media content creators; I did it myself a lot in late 2016 and early 2017, and pretty much all my indie media peers at the time did too.
Among the sites banned are government accountability sites, as explained by Radley Balko:
As part of its purge, Facebook has removed the pages of several police accountability/watchdog/critic groups, including Cop Block, the Free Thought Project, and Police the Police. They've also apparently severely restricted activity for the Photography Is Not a Crime page.
The purge has clearly been coordinated between both Facebook and Twitter, which have banned many of the same sites at the same time.
Notable this time, however, many of the sites being banned are left-wing sites devoted to anti-war causes, or in calling the government out on abuses of power. In this purge and in previous purges, however, many of the banned sites, whether right or left have one thing in common: they are anti-establishment.
So, media outlets that call for the mass murder or Yemenis or Syrians or Iranians, or which look the other way as domestic agencies violate the civil rights of Americans, will be perfectly find. But if you draw attention to these abuses of power? Then, it's "propaganda" and must be banned.
It's impossible to predict who the next purge will target, but now is a good time to remind everyone that the best way to ensure you receive mises.org's content every day is to sign up for our daily email. Simply click on the "subscribe" button on the main page.
Tom Woods joined Matt Welch of Reason TV for a wide ranging interview with topics including his transformation from a pro-war Republican to a passionately anti-war libertarian, the impact of Ron Paul on the liberty movement, and politics in the age of Donald Trump.
This week the Trump administration announced it will giving a major gift to American corn farmers by expanding the sale of ethanol in the US.
Trump, a vocal supporter of corn ethanol, will order EPA to allow year-round sales of gasoline with 15 percent ethanol content, an increase over the 10 percent blends that are sold at most gas stations around the nation. The sale of the blends, known as "E15," is currently prohibited during the summer months in several states because of Clean Air Act restrictions, and corn growers have long sought to expand sales of the higher concentrations.
"This is a big deal," said Jeff Navin, a Democratic former aide to ex-Senate Majority Leader Tom Daschle of South Dakota and former chief of staff in the Obama administration's Energy Department. "It's not something that makes a front page of East and West Coast newspapers, but it's something that farmers watch closely. I’m sure the political team and elected officials in Iowa told [Trump] he has to do something to staunch bleeding."
The “bleeding” in this case is the hit the farm industry has taken as a result of Trump’s trade policies. While last week’s agreements with Mexico and Canada offered Trump “winning” headlines, the changes to NAFTA will do little to offset the hit farmers have taken as a result of the administration's antagonistic approach to China and other foreign markets. The timing, a month away from mid-terms, is likely not a coincidence as Trump seeks to bolster his standing with one of his key bases of support in 2016.
Though the legality of the EPA’s waiver is likely to be challenged by Big Oil, this move is a major victory for ethanol special interest groups. As Emily Skor, the CEO of a prominent ethanol trade association, boasted after the announcement:
We’re very excited to hear the president’s upcoming announcement. He knows farmers are hurting and they want action on E15 in time for the next summer driving season. Year-round sales of E15 nationwide could deliver demand for two billion bushels of American corn and help restore growth in rural communities.
Unfortunately this win for farmers is another example of how the public are the ones that inevitably pay the cost for Trump’s trade battles.
First of all, ethanol never made much sense as a form of fuel. It’s “success” was a direct result of political subsidies – in no small part aided by Iowa’s coveted position as the first presidential contest every four years. For years the industry was reliant upon tax credits that made the price of ethanol profitable. Even though those tax credits were finally allowed to expire in 2012, ethanol has continued to be propped up due to the EPA’s Renewable Fuel Standards. As the name suggests, the Bush-era policy is a mandate that fuel sold in the United States much contain a certain percentage of “renewable fuel.” In the words of Aaron Smith of AEI, “Removing the tax credit but keeping the RFS is like scraping a little frosting from the ethanol-boondoggle cake.”
The result has been government-driven demand for corn-based ethanol. The consequences of this policy include rising food prices, as it not only directly drives up the price of corn but also incentivizes farmers to grow corn at the expense of other crops.
As Randy Holcombe tried to calculate the costs for tax payers in a 2015 Mises Wire article:
The U.S. Department of Agriculture says in 2011 the total value of the corn crop was $63.9 billion, and that there were 400,000 corn farms in the United States. Because the price of corn has doubled due to the mandate, half of that revenue, or $31.95 billion, is a transfer from consumers to corn farmers in the form of higher prices.
Dividing that $31.95 billion cost among 319 million Americans, the cost to each American from the ethanol mandate is just about $100 a year. That includes not only the price of ethanol, but the higher price of corn in all its other uses.
That $31.95 billion is shared among the 400,000 corn farmers, so the average benefit to each farmer is $79,875.
Of course, there is another downside to government ethanol mandates – it’s not particularly good for automobiles.
The reason the ethanol content of mainstream “gas” has so far been limited to 10 percent is because higher ethanol content will damage engines (and fuel storage/delivery systems) not specifically designed to handle it. The stuff accelerates rusting of gas tanks and fuel lines and can damage rubber seals and gaskets not designed to withstand it – the latter potentially leading to fuel leaks and fires....
Very few cars of any vintage – including most new/recent-model cars – are designed to handle “gas” that is more than 10 percent ethanol. Owners of these vehicles are specifically warned not to use “gas” with more than 10 percent ethanol unless specifically told it’s okay. Advised that using more than E10 if not specifically okay’d will void the warranty and leave them holding the bag for any damage done to the engine and related components, such as the fuel tank, fuel pump and fuel lines.
So here we have a great illustration of the heavy hand of government at work:
- Government hurts farmers by increasing the cost of doing business overseas.
- Government creates a new government policy to help farmers.
- Costs of the policy are passed on to consumers, with the added collateral damage of hurting our cars.
“I’m from the government and I’m here to help.”
“In the long run we are all dead.”
This famous retort of the most influential economist of the twentieth century, John Maynard Keynes, was meant as a rebuttal to the views of the classical or free market economists. The entire quote reads:
But the long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again. [A Tract on Monetary Reform, p. 80]
Unfortunately, most rejoinders to this quote from Keynes have focused on the value of long-term thinking in economic analysis, when in fact; the issue is just as surely the nature of the analogy itself. And since most casual readers of Keynes’s quote will be taken with the clever and telling point regarding the thought of economists, it has persuasive power.
But if we are to stop would-be Keynesian propagandists from scoring points with the phrase we must reveal the sleight of hand concealed therein. The nature of this sleight of hand is to take an event occurring in nature, a storm, and treating a depression as if it, too, were an equally and randomly occurring event of nature.
So, while a storm may be a natural occurrence, this is not the case with an economic depression. A depression is caused by intervention into the economy in the form of monetary expansion — hence the boom preceding the bust. With this kept closely in mind we can rephrase Keynes’ quote using an act of human shortsightedness that will render Keynes’ cleverness the thinking of fools:
Economists set themselves too easy, too useless a task if in the case of an extensive drinking binge they can only tell us that once the alcohol’s effect is long past the drinker will feel better again.
It becomes very evident why Keynes chose his particular example for ridiculing long-run thinking economists. By rendering the depression as analogous to a storm at sea, Keynes has taken all focus off the act — artificially increasing the money supply and thus lowering interest rates so that malinvestments accumulate — leading up to the consequences of that act, and thus is relieved of any analysis of the activity which would result in an economic depression.
The Royal Academy made a clear political statement with this year's Nobel Prize in economics. Coming a day after the United Nations panel on climate change issued its dire warning on climate change, this award attempts to emphasize the long term impact of climate change on the economy and economic growth. In Mr. Nordhaus case, he emphasizes how climate change has a significant economic cost. In Mr. Romer's case, he emphasizes how government-stimulated research and technology can be used to address issues such as climate change while enhancing economic growth. They both believe government policy is the key.
The problem here is what we know and what we do not know. What we know is that the climate has always been changing billions of years before humans ever showed up. We know that the climate is changing and that it will continue to change. What we don't know much about is what causes the various changes, what the direction of change is, and whether that change will be good or bad for humans and the economy. We certainly do not know how to control the climate and some our futile efforts, such as electric cars and carbon taxes, have little conceivable impact on climate change and are costly. With President Trump relaxing environmental regulations and pulling out of the Paris Accord on Climate Change, this year's award should be viewed as anti-Trump statement by the Academy.
Why is this nomination the subject of such rancor?
I have argued countless times that the federal government has grossly exceeded the limitations the Constitution imposes on it. Wherever you are as you read these words, look around you and try to find something in your line of sight that is not regulated by the federal government. It will be nearly impossible. Today the feds regulate not only our personal private behavior but also the states that created the federal government. More than half of each state’s budgetary expenditures are mandated by the feds.
And passing final judgment on all this — ratifying the Wilsonian view of the federal government (the feds may do whatever there is a political will to do, except that which the Constitution expressly prohibits) and eschewing the Madisonian view (the feds may do only what the Constitution expressly authorizes) — is the Supreme Court.
As the reach of federal power has expanded, the power of the Supreme Court to restrain or unleash that reach has expanded. Add to this the life tenure of Supreme Court justices and the mania for re-election of members of Congress and you can recognize the slow transfer of governmental power from the elected branches to the unelected one.
Should the right to life and the extent of the imperial presidency and whether the government is obligated to provide health care be decided by elected representatives or by the Supreme Court? From those who expect the high court to decide these issues — a court now evenly split, 4 to 4, along ideological lines — is it any wonder the Kavanaugh nomination is worth a bitter battle?
The Supreme Court should not be political. It is the anti-democratic branch of government. Its constitutional obligation is not to do the people’s will but to preserve personal liberty from the tyranny of the majority.
Excerpted from Treating the Court as a Political Branch
Tonight Joseph Salerno will join The Sabrin Center for Free Enterprise at Ramapo College of New Jersey for a panel looking back at the 2008 financial crisis. The event is focused on the questions "Why it happened, how it happened, could it happen again?" It will begin at 7 pm ET and will be streamed live.
Other speakers will include:
Alan Blinder, the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs at Princeton University and a Non-Resident Senior Fellow at the Brookings Institution. He is also Vice Chairman of the Promontory Interfinancial Network, and a regular columnist for The Wall Street Journal. Blinder served as Vice Chairman of the Board of Governors of the Federal Reserve System from June 1994 until January 1996. In this position, he represented the Fed at various international meetings, and was a member of the Board’s committees on Bank Supervision and Regulation, Consumer and Community Affairs, and Derivative Instruments.
Christine Cumming, who retired from the Federal Reserve Bank of New York in June 2015.
Patricia C. Mosser,a Senior Research Scholar and Senior Fellow at Columbia University’s School of International and Public Affairs and Director of the Initiative on Central Banking and Financial Policy.
Richard Sylla, Professor Emeritus of Economics at the Stern School of Business, New York University.
This morning on The Wasatch Report on the Cerberus Radio Network, Suzanne Sherman and I discussed how the US Supreme Court has become far more powerful than was ever intended. We also looked at the problem with the common American idea that the Supreme Court exists to limit federal power, or that its judges are impartial and non-political, seeking only a reasoned, legal interpretation of the laws. This has never been true, but the political nature of the court is far more damaging now because so much power has now been concentrated in the federal government.