I just joined Liberty Classroom

I'll be posting on my experiences with this educational resource. Of course, I will not be posting content, since it is a pay site, but take these blog posts as a review of the site.

Liberty Classroom

Obama is getting grey

Has anyone else noticed how much grey hair Obama has gotten over the last four years?

2008:

2012:

The office of President of the United States is such a stressful job that nobody in his right mind should seek to fill it. Which is why, I think we always get such lousy candidates for the job.

Short Sellers: The crony capitalist's enemy

There are a lot of ways that opponents of capitalism don't understand how important financial markets are to the way a healthy economy functions. They see people who sit in an office or work on the floor of an exchange as parasites on the system, instead of productive members of society like construction workers or people working on an assembly line. With a construction worker (at least when he isn't leaning on a shovel), it is easy to see the product of his labor, what he is contributing to society. Its not quite so easy to see with a stock broker or financial consultant.

But financial markets are VERY important to a smooth running modern economy. Many economists have explained how speculation helps to coordinate the use of resources and stabilize prices. During a harvest, speculators buy up grain when supplies are abundant and prices would otherwise be low. This provides the farmers with higher prices. But then the speculators save the grain for later in the season, keeping it off the market so it will be available when grain supplies would otherwise be scarce.

It is hardest too see the benefit to the whole economy of having short sellers. I myself have trouble getting around the fact that short sellers are betting on the destruction of value. Emotionally, this, to me, seems creepy, destructive, sneaky, even dishonest. But the more intellectual parts of me have to acknowledge the great good that has been done by short sellers. What they do is reveal the rot in our economy, and speed the healing process.

Take Enron for example:  regulators should have known that something was wrong, but they turned a blind eye. It was speculators who uncovered the corruption, made a big profit selling the company short, and demonstrating to the world that the company was, in fact, an empty shell. The short sellers did not destroy Enron. It was already hollowed out and destroyed. We didn't know it, yet.

What the short sellers did was speed the process by which people came to realize all this.

Without the profits available to short sellers, there is not as much motivation to do the research, take a really good look at a company's books and see if it is really as profitable as people think it is.

The elephant and the blind men

Whenever discussion comes up about the 2008 financial crisis, and I end up asking, again "what free market?", I tend to think of the story of the elephant and the blind men. Everyone knows the story. A group of bland men want to know what an elephant looks like, so they find one, and all of them go to touch it, to feel it and find out what everyone is talking about. One touches the elephant's trunk, and says that an elephant is like a snake. Another is at its ear and says an elephant is like a big banana leaf. A third is at one of its legs and says that an elephant is like a tree trunk. The blind man at the elephant's tail says that it is like a rope, and so on.

A large number of free market observers have each pointed out different aspects of government intervention which helped create the housing bubble and the financial collapse of 2008.

Thomas Sowell, in his book The Housing Boom and Bust, describes land use regulations such as "open space" laws and limits to the height of apartment buildings as the cause of localized high housing prices which government officials all the way up to the White House mistook for a national problem, which they tried to solve with such things as Bill Clinton's "National Homeownership Strategy".

Thomas Woods describes the role of the Austrian Theory of the Business Cycle (ABC) and low interest rated from the Federal Reserve in Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse.

Daniel Henninger explains the role of things like deposit insurance in affecting banks' behavior in regards to risk in Welcome to 'Moral Hazard'.

Others show how deposit insurance was created to fix problems that were caused by previous regulation:

A Perfect Stormof Ignorance

Other observers have implicated the SEC's role in turning our rating agencies into a virtual monopoly, requiring banks to use Moody's, S&S, and Fitch, the three big ones, in order to invest in securities:

A Government Failure, Not a Market Failure

End the Credit Rating Monopoly

There is probably a whole lot more I can list, if I just keep digging. No economist, conservative or free market politician or commentator, or blogger has named all the regulations which helped to contribute to the housing bubble and financial crisis of 2008. To fully understand it, or at least try to, you need to read many different sources, each of which provide a small piece of the whole picture. 

For those who love free markets, the housing bubble and the collapse of 2008 provide a target rich environment for blaming government for its interference in markets.

I went to Occupy

Occupy The Truth, that is. The Tea party is sick and tired of the media's lopsided and biased coverage of them and the Occupy movement. Every time there is some violence in our society, the Tea Party is blamed, even if there is no hint of any link between the perpetrators of mass shootings and the Tea Party. They even have to manufacture stories of Tea Party members spitting on senators and using the "N" word. But if Occupy movement members are caught planning terrorist attacks, the media turns a blind eye.

The truth is that the Tea Party has been a model of civility and respect for the rule of law, while the Occupy movement has been barbaric from the very beginning.

I'm so glad I went to this event. I got to meet Michelle Malkin.

Its Bash Ayn Rand Fest at Huffington Post

The story came out in the news that the new VP candidate, Paul Ryan, is an admirer of Ayn Rand, and the attacks are coming out of the woodwork. A lot of the same old strawman attacks, smears, misrepresentations and outright lies are being told about Ayn Rand.

One of the most blatant is that she was an admirer of a child killer, William Edward Hickman. The source material for this comes from The Journals of Ayn Rand. She wrote about this child murderer, making notes for a story she wanted to write, using Hickman as a model for a major character. What the liars are leaving out is that in those journals, Rand calls Hickman "depraved" and a "Purposeless monster".

The other big smear is the very true fact that Ayn Rand accepted Social Security and Medicare payments near the end if her life, supposedly proving that she was a hypocrite, and could not live by her unrealistic moral philosophy. But in no way was accepting SS and Medicare hypocritical. She had payed taxes most of her life in America, and she considered taxation to be theft. As she explained years before she accepted any such payments, in an essay called “The Question of Scholarships,” in The Objectivist, 1966:

Since there is no such thing as the right of some men to vote away the rights of others, and no such thing as the right of the government to seize the property of some men for the unearned benefit of others—the advocates and supporters of the welfare state are morally guilty of robbing their opponents, and the fact that the robbery is legalized makes it morally worse, not better. The victims do not have to add self-inflicted martyrdom to the injury done to them by others; they do not have to let the looters profit doubly, by letting them distribute the money exclusively to the parasites who clamored for it. Whenever the welfare-state laws offer them some small restitution, the victims should take it . . . .

The same moral principles and considerations apply to the issue of accepting social security, unemployment insurance or other payments of that kind. It is obvious, in such cases, that a man receives his own money which was taken from him by force, directly and specifically, without his consent, against his own choice. Those who advocated such laws are morally guilty, since they assumed the “right” to force employers and unwilling co-workers. But the victims, who opposed such laws, have a clear right to any refund of their own money—and they would not advance the cause of freedom if they left their money, unclaimed, for the benefit of the welfare-state administration.

But since there are some people who need an excuse, any excuse at all, to reject Ayn Rand and everything she said, the continue to cling to these smear tactics, and refuse to even apologize when their falseness is pointed out to them.

They keep lying about Milton Friedman

Why do they have to try to hit a man when he's down? Milton Friedman died almost six years ago, and the liberals have been attacking him ever since, though he can't defend himself.

Its because even though he is dead, he is still one of their strongest enemies. His words live on in his books, articles, and videos available on Youtube. People can read and listen to his powerful defenses of free market capitalism, and his influence lives on.

Which is why Naomi Klein did her best to smear his name by trying to blame him for the worst abuses of the Pinochet regime, though he and his Chicago Boys had no real influence there till three years after the coup, long after most of the abuses actually happened.

Now Krugman and a few other Keynesians are trying to claim he was on their side. Of all the insults, that's hitting below the belt!

From A Lovefest Between Milton Friedman and J.M. Keynes by Nicholas Whapshott:

Yet Friedman’s contemporary supporters no less than his critics will be surprised to learn that he was in fact an enormous admirer of John Maynard Keynes—the patron saint of the New Deal—and not at all the absolute opponent of big government he is usually presumed to be.

 Really?

Yet in his buried essay on Keynes, Friedman expressed a more complicated view. Abruptly dismissing Hayek’s notion that big government tends to curb the rights of individuals, Friedman reports that in Britain, where government was administered with integrity and honesty, governments have grown large without endangering the public good.

Where did he get that impression? Sounds to me like Friedman is saying the exact opposite, though maybe in a nice way so the publishers wouldn't be put off from actually including his essay.

Here is what Friedman actually said:

John Maynard Keynes by Milton Friedman:

The persuasiveness of Keynes’s view was greatly enhanced in Britain by historical experience, as well as by the example Keynes himself set. Britain retains an aristocratic structure—one in which noblesse oblige was more than a meaningless catchword. What has changed are the criteria for admission to the aristocracy—if not to a complete meritocracy, at least some way in that direction. Moreover, Britain’s nineteenth-century laissez-faire policy produced a largely incorruptible civil service, with limited scope for action, but with great powers of decision within those limits. It also produced a law-obedient citizenry that was responsive to the actions of the elected officials operating in turn under the influence of the civil service. The welfare state of the twentiethcentury has almost completely eroded both elements of this heritage. But that was not true when Keynes was forming his views, and during most of his public activity.

Notice that Friedman is saying that government can be good and incorruptible, bot only when it is limited. Clearly not an argument for BIG government, but limited government. It is the laissez-faire of the 19th century which made the SMALL government incorruptible, and the growth of government in the 20'th that corrupted it.

What is more, Friedman is saying that it is the incorruptible government of the 19th century that made Keynes thing that a big government could act responsibly.But small, responsible government doesn't mean big government can be responsible.