The Rational Argumentator – Page 36 – A Journal for Western Man – Championing Reason, Rights, and Progress Since 2002

What Did Fed Chairman Yellen Tell Obama? – Article by Ron Paul

April 18, 2016 Ron Paul Comments 0 Comment

Ron Paul

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This week, President Obama and Vice President Biden held a hastily arranged secret meeting with Federal Reserve Chairman Janet Yellen. According to the one paragraph statement released by the White House following the meeting, Yellen, Obama, and Biden simply “exchanged notes” about the economy and the progress of financial reform. Because the meeting was held behind closed doors, the American people have no way of knowing what else the three might have discussed.

Yellen’s secret meeting at the White House followed an emergency secret Federal Reserve Board meeting. The Fed then held another secret meeting to discuss bank reform. These secret meetings come on the heels of the Federal Reserve Bank of Atlanta’s estimate that first quarter GDP growth was .01 percent, dangerously close to the official definition of recession.

Thus the real reason for all these secret meetings could be a panic that the Fed’s eight-year explosion of money creation has not just failed to revive the economy, but is about to cause another major market meltdown.

Establishment politicians and economists find the Fed’s failures puzzling. According to the Keynesian paradigm that still dominates the thinking of most policymakers, the Fed’s money creation should have produced such robust growth that today the Fed would be raising interest rates to prevent the economy from “overheating.”

The Fed’s response to its failures is to find new ways to pump money into the economy. Hence the Fed is actually considering implementing “negative interest rates.” Negative interest rates are a hidden tax on savings. Negative interest rates may create the short-term illusion of growth, but, by discouraging savings, they will cause tremendous long-term economic damage.

Even as Yellen admits that the Fed “has not taken negative interest rates off the table,” she and other Fed officials are still promising to raise rates this year. The Federal Reserve needs to promise future rate increases in order to stop nervous investors from fleeing US markets and challenging the dollar’s reserve currency status.

The Fed can only keep the wolves at bay with promises of future rate increases for so long before its polices cause a major dollar crisis. However, raising rates could also cause major economic problems. Higher interest rates will hurt the millions of Americans struggling with student loan, credit card, and other forms of debt. Already over 40 percent of Americans who owe student loan debt are defaulting on their payments. If Federal Reserve policies increase the burden of student loan debt, the number of defaults will dramatically increase leading to a bursting of the student loan bubble.

By increasing the federal government’s cost of borrowing, an interest rate increase will also make it harder for the federal government to manage its debt. Increased costs of debt financing will place increased burden on the American people and could be the last straw that finally pushes the federal government into a Greek-style financial crisis.

The no-win situation the Fed finds itself in is a sign that we are reaching the inevitable collapse of the fiat currency system. Unless immediate steps are taken to manage the transition, this collapse could usher in an economic catastrophe dwarfing the Great Depression. Therefore, those of us who know the truth must redouble our efforts to spread the ideas of liberty.

If we are successful, we may be able to force Congress to properly manage the transition by cutting spending in all areas and auditing, then ending, the Federal Reserve. We may also be able to ensure the current crisis ends not just the Fed but the entire welfare-warfare state.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Impacts of Indefinite Life Extension: Answers to Common Questions – Article by G. Stolyarov II

April 15, 2016 Gennady Stolyarov II Comments 2 comments

G. Stolyarov II

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As a proponent of attaining indefinite human longevity through the progress of medical science and technology, I am frequently asked to address key questions about the effects that indefinite life extension would have on human incentives, behaviors, and societies. Here, I offer my outlook on what some of these impacts would be.

What would be the benefits of life extension?

(1) The greatest benefit of life extension is the continued existence of the individual who remains alive. Each individual – apart from the worst criminals – has incalculable moral value and is a universe of ideas, experiences, emotions, and memories. When a person dies, that entire universe is extinguished, and, to the person who dies, everything is lost and not even a memory remains. It is as if the individual never existed at all. This is the greatest possible loss and should be averted if at all possible. The rest of us, of course, also lose the possible benefits and opportunities of interacting with that individual.

(2) People would be able to accomplish far more with longer lifespans. They could pursue multiple careers and multi-year personal projects and could reliably accumulate enough resources to sustainably enjoy life. They could develop their intellectual, physical, and relational capabilities to the fullest. Furthermore, they would exhibit longer-term orientations, since they could expect to remain to live with the consequences of decisions many decades and centuries from now. I expect that a world of longer-lived individuals would involve far less pollution, corruption, fraud, hierarchical oppression, destruction of other species, and short-term exploitation of other humans. Prudence, foresight, and pursuit of respectful, symbiotic interactions would prevail. People would tend to live in more reflective, measured, and temperate ways instead of seeking to haphazardly cram enjoyment and activity into the tiny slivers of life they have now. At the same time, they would also be more open to experimentation with new projects and ideas, since they would have more time to devote to such exploratory behaviors.

(3) Upon becoming adults, people would no longer live life in strict stages, and the normative societal expectations of “what one should do with one’s life” at a particular stage would relax considerably. If a person at age 80 is biologically indistinguishable from a person at age 20, the strict generational divides of today would dissipate, allowing a much greater diversity of human interactions. People will tend to become more tolerant and cosmopolitan, having more time to explore other ways of living and to understand those who are different from them.

(4) Technological, scientific, and economic progress would accelerate rapidly, because precious intellectual capital would not be lost to the ravages of death and disease. Longer-lived humans would be more likely to invest in projects that would materialize over the course of decades, including space travel and colonization, geo-engineering and terraforming, prevention of asteroid impacts and other natural disasters, safe nuclear disarmament and disposal of nuclear waste, and long-term preservation of the human species. The focus of most intelligent people would shift from meeting quarterly or annual business earnings goals and toward time- and resource-intensive projects that could avert existential dangers to humankind and also expand humanity’s reach, knowledge, and benevolence. The achievement of significant life extension would inspire many intelligent people to try to solve other age-old problems instead of resigning to the perception of their inevitability.

(5) Major savings to health-care systems, both private and governmental, would result if the largest expenses – which occur in the last years of life today, in the attempt to fight a losing battle against the diseases of old age – are replaced by periodic and relatively inexpensive rejuvenation and maintenance treatments to forestall the advent of biological senescence altogether. Health care could truly become about the pursuit of sustainable good health instead of a last-ditch effort against the onslaught of diseases that accompanies old age today. Furthermore, the strain on public pensions would be alleviated as advanced age would cease to be a barrier to work.

What drawbacks would life extension pose?

I do not see true drawbacks to life extension. Certainly, the world and all human societies would change significantly, and there would be some upheaval as old business models and ways of living are replaced by new ones. However, this has happened with every major technological advance in history, and in the end the benefits far outweigh any transitional costs. For the people who remain alive, the avoidance of the greatest loss of all will be well worth it, and the human capacity for adaptation and growth in the face of new circumstances is and has always been remarkable. Furthermore, the continued presence of individuals from older generations would render this transition far more humane than any other throughout history. After all, entire generations would no longer be swept away by the ravages of time. They could persist and preserve their knowledge and experience as anchors during times of change.

Every day, approximately 150,000 people die, and approximately 100,000 of them die from causes related to senescence. If those deaths can be averted and the advent of indefinite life extension accelerated by even a few days, hundreds of thousands of irreplaceable individual universes would be preserved. This is worth paying even substantial costs in my view, but, fortunately, I think the other – economic and societal – effects that accompany life extension would be overwhelmingly positive as well.

As Death is Wrong, my illustrated children’s book on the prospects for life extension, points out, “Death is the enemy of us all, to be fought with medicine, science, and technology.” The book discusses the benefits of life extension in a language and format accessible to most children of ages 8 or older. Death is Wrong also outlines some common arguments against life extension and reasonable responses to them. For instance, I respond to the common overpopulation argument as follows: “human population is the highest it has ever been, and most people live far longer, healthier, more prosperous lives than their ancestors did when the Earth’s population was hundreds of times smaller. Technology gives us far more food, energy, and living space than our ancestors had, and the growth in population only gives us more smart people who can create even more technologies to benefit us all. Besides, humans ought to build more settlements on land, on water, underwater, and in space. Space travel could also save the human species if the Earth were hit by a massive asteroid that could wipe out complex life. ” I respond to the boredom argument by stating that, due to human creativity and discovery, the number of possible pursuits increases far faster than the ability of any individual to pursue them. For instance, thousands more books are published every day than a single person could possibly read.

Would governments ban indefinite life extension if it is achieved?

Once life-extending treatments are developed and publicly available, national governments would not be effectively able to ban them, since there will not be a single medicine or procedure that would accomplish indefinite lifespans. Rather, indefinite life extension would be achieved through a combination of treatments, beating back today’s deadliest diseases using techniques that would not be limited in their application to people who explicitly want to live longer. (For instance, people who do not harbor that particular desire but do want to get rid of cancer, heart disease, or Alzheimer’s disease that may afflict them or their loved ones, would also benefit from the same treatments.) These treatments would be as embedded in the healthcare systems of the future as over-the-counter drugs like aspirin and ibuprofen are today; it would be practically impossible to ban them, and countries that did would face massive black markets or people traveling abroad to receive the same treatments.

Furthermore, genuine healthy life extension could be a great fiscal solution for many welfare states today, which are finding themselves with unsustainable burdens pertaining to old-age healthcare and pensions. The majority of health-care costs are expended to keep frail people alive a little bit longer and to fight an expensive and ultimately losing battle against the diseases of old age. The only way dramatic life extension could occur is if regular and relatively inexpensive maintenance (made inexpensive through the exponential progress of information technologies and bio/nanotechnology) prevented the decline of the body to such a stage where expensive, losing battles needed to be fought at all. Replacing the current extremely expensive end-of-life medical care with periodic rejuvenation and maintenance would be a great cost-saver and may avert a major fiscal crisis.

What concerns me is not governments banning life-extension technologies once they are developed, but rather existing political systems (and their associated politically connected established private institutions) creating barriers to the emergence of those technologies in the first place. Most of those barriers are probably inadvertent – for instance, the FDA’s approval process in the United States premised on a model of medicines and treatments that must focus on single diseases rather than the biological aging process as a whole. However, there have been influential “bioethicists”, such as Leon Kass, Daniel Callahan, and Sherwin Nuland, who have explicitly and extensively spoken and written against healthy life extension. It is important to win the contest of ideas so that public opinion does not give encouragement to the “bioconservative” bioethicists who want to use the political process to perpetuate the old cycle of life, death, and decay – where each generation must be swept away by the ravages of senescence. We must stand for life and against age-old rationalizations of our own demise.

This essay may be freely reproduced using the Creative Commons Attribution Share-Alike International 4.0 License, which requires that credit be given to the author, G. Stolyarov II. Find out about Mr. Stolyarov here.

Actually, “Neoliberalism” Is Awesome – Article by Scott Sumner

April 13, 2016 Scott Sumner Comments 0 Comment

Scott Sumner

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Unfortunately, What’s Best for the World Is Not Best for Every Subset of It

I am seeing more and more articles, even at respectable outlets such as the Economist and the Financial Times, suggesting that the rise of right-wing and left-wing populism shows that something is wrong with the neoliberal model.

Nothing could be further from the truth. The past two decades have been by far the best two decades in human history, and that’s what really matters.

Naysayers will sometimes acknowledge that hundreds of millions of people have recently risen out of poverty, but then claim that living standards have stagnated in America. That’s also nonsense, as I explained in this post.

The next fallback position is that while real incomes in America have risen, the gains have gone to corporations, not workers. That’s also nonsense, as I explained in this post. The share of national income going to workers today is the same as it was 50 years ago, the supposed heyday of the working class.

The next fallback position is that while wages have done fine, even in real terms, wage income is becoming less equal. Bingo! Finally we get to an accurate statement. Fifty years ago, blue-collar workers at General Motors often made more than college professors. People with short attention spans sometimes act like this period was “normal”, ignoring 10,000 years of human history. They seem to suggest that our most pressing problem is that young men who don’t study in school and just shoot rubber bands across the classroom should be able to earn an income that (in relative terms) was never possible in any period of world history before the 1950s and has never been possible in any period of world history after the 1970s. It reminds me of when farmers used to set the “parity” of farm prices with other goods prices based on the relatively high levels of 1909-14, treating that ratio as normal for purposes of farm subsidies.

Don’t get me wrong: I have nothing against blue-collar workers. I’m relatively intellectual, and even I found the public schools to be mind-numbingly boring. I could hardly stay awake. I can’t even imagine how students less interested in ideas than I am could’ve gotten through the day. Nor am I one of those conservatives that will trash low-income whites for their lifestyle choices. As far as blue-collar workers are concerned, I wish them well. But I wish everyone well (except Trump), and the unfortunate truth is that the set of economic policies that is best for the world right now is probably not optimal for a subset of American blue-collar workers.

When I point out that the most important factor in trade policy is the impact on the poor in developing countries, some of my commenters tell me that the US shouldn’t have to import from China or India because they have lots of other countries to sell to. As Marie Antoinette might’ve said “let them sell to Canada.” That’s right, progressives ease their conscience by claiming that other developed countries won’t follow the same evil trade policies that progressives like Sanders want the US to follow, so things won’t actually be that bad for poor people in Bangladesh. More often, they entirely ignore the issue.

I know that progressives like to think of themselves as the good guys, but the honest truth is that on trade they are increasingly becoming the bad ones, right along with Trump.

And here’s what else people don’t get. Not all the problems in the world are caused by neoliberal economic theories, for the simple reason that not all economic policies reflect neoliberal economic theories. Even if everything people say about inequality is true, there’s nothing wrong with the neoliberal model, which allows for the EITC, progressive consumption taxes, and sensible reforms of intellectual property rights, occupational licensing, and zoning laws.

I can’t help it if Democratic politicians oppose reforms of intellectual property rights. I can’t help it if progressives that once favored progressive consumption taxes now oppose progressive consumption taxes. I can’t help it if Democrats voted to repeal the luxury tax on yachts soon after having enacted a luxury tax on yachts. I can’t help it if progressives suddenly feel that a $15 an hour minimum wage is not a loony idea.

The simple truth is that neoliberal economic policies work, as we’ve seen in Denmark and Switzerland and Singapore, and socialism doesn’t work, as we’ve seen in Venezuela. So I’m asking all those wavering neoliberals in the respectable press (Thatcher called them “wets“) to stop your handwringing and get out there and boldly defend the neoliberal model. It’s not just the best model; in the long run it’s the only model that really works.

Scott B. Sumner is the director of the Program on Monetary Policy at the Mercatus Center and a professor at Bentley University. He blogs at the Money Illusion and Econlog.

This article was originally published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

Censorship Is an Unjustifiable Privilege – Article by Chris Marchese

April 13, 2016 Chris Marchese Comments 0 Comment

Chris Marchese

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Free Speech Is about the Power to Challenge the Status Quo

Free speech is the great equalizer in our society. It doesn’t matter about your race, ethnicity, sex, gender identity, gender expression, sexual orientation, class — you get the point — the First Amendment protects your right to speak freely. Despite this, some student activists — perceiving unequal social conditions, including at institutions of higher education — are fighting for social change at the expense of free speech. The sad irony, however, is that free speech only becomes privileged when it’s restricted, which is why free speech must remain a right equally applicable to all.To understand why, consider Nigerian author Chimamanda Ngozi Adichie’s commencement speech at Wellesley College in 2015. In it, she said, “You, because of your beautiful Wellesley degree, have become privileged, no matter your background.” But, she added, “Sometimes you will need to push [this privilege] aside in order to see clearly,” because “privilege blinds” you to those who are different.

Students calling for speech restrictions are particularly blinded by their privilege, which leaves them unable to see the unjust privilege that restricting speech would further confer upon them. This is dangerous and counterproductive to their cause.

Restricting Speech Is an Unjust Privilege
First, to support restrictions on certain kinds of speech, activists must have (or at least project) unwavering confidence in both themselves and the system in which they are operating — the university in this case — to discern what’s offensive. Even if they see gray areas in expression, they are forced to present issues in absolutist terms if they are to have the perceived moral authority to police and punish those who offend.

Turning again to Adichie’s speech, we can see why this is wrong. As she said, “I knew from … the class privilege I had of growing up in an educated family, that it sometimes blinded me, that I was not always as alert to the nuances of people who were different from me.”

Sometimes, people are genuinely racist (though what’s considered racist varies widely from place to place) and their speech is identifiable as such. But what about the student who isn’t aware of the offense he or she may cause by wearing a sombrero at a party, which some consider cultural appropriation? How about the student who is aware but disagrees that it’s offensive? Should he or she be censored and punished based upon some activists’ standards of right and wrong? Different people have different experiences and different views. Because of this, nuance matters.

Second, while it can be tempting to argue that free speech maintains inequality because it protects offensive speech, this argument fails to distinguish between people and their views. That is, when you censor people — even for offensive speech — you are denying them equal access to, and protection of, the First Amendment and you are doing so from a position of privilege. The right to free speech gives everyone an equal right to voice his or her opinions — but it does not mean that such opinions will win or even register in any given forum.

Restrictions on free speech, on the other hand, make both people and ideas unequal by subjugating them to someone else’s understanding of what’s right and therefore allowable. Indeed, to assume one’s views are so infallible as to warrant imposition on others and to assume there is no legitimate debate left to be had on certain topics — and the language used in discussing those topics — is a privilege that oppresses not only the hated racist, but the honest dissenter and everyone in between.

Lastly, some students claim that free speech is about power — that it enables and sustains privilege for some but not all. Let’s be clear: free speech is about power. It’s about having the power to challenge the status quo, question society’s deeply held beliefs, and call others to task. But free speech only becomes privileged when it’s restricted.

Understanding the Would-Be Censors
Of course words can have consequences. (If they couldn’t, nobody would bother speaking.) It would be hypocritical to argue that offensive speech will never cause harm, at least to feelings or interests, while also maintaining that speech is so vital it requires robust protection. One could also argue that the marketplace of ideas — like all markets — has negative externalities. The most evident, as campus activists assert, is that offensive speech is protected and those it’s directed at — typically thought to be minorities — are disproportionately burdened by it.

Moreover, restricting or punishing speech provides instant gratification. It’s an immediate and swift response to views one finds abhorrent. It gives the impression that justice has been served. For those who believe society is stacked against them, it’s a small beacon of hope. Restricting speech, then, isn’t seen as infringing upon someone else’s liberty, but rather righting a wrong. The emotional appeal is understandably strong.

But this is not right.

A Just Alternative
The best way to counter hateful, offensive speech is with more speech. Think of it this way: restricting speech treats the symptoms of bigotry by making its manifestations less visible. Conversely, more speech acts as a cure by attacking the underlying disease. The former method may seem effective in the short term, but it’s dangerous in the long run.

As FIRE President and CEO Greg Lukianoff has argued, when offensive speech is banned, it drives those with potentially dangerous views (however determined) underground, making them harder to identify, while also potentially making them more extreme. It also gives a false sense of social progress. And who ultimately pays the price? The people the bans were meant to help, when it turns out society wasn’t as friendly as they believed.

Countering hateful speech with more speech is not seamless. It’s hard work, and it’s not instant. It doesn’t guarantee the flushing of all bigoted and hateful opinions from society, and it often works slowly. Nevertheless, it is the only method that is both just and that makes progress last. Engaging with people who express views different from one’s own moves beyond the superficial to challenge core beliefs, assumptions, and biases — and can help a person identify and recognize his or her own. Consider the case of Megan and Grace Phelps, granddaughters of the pastor who founded the Westboro Baptist Church. After interacting with a Jewish man by email and on Twitter, the sisters decided their views were wrong and decided to leave the WBC, which also meant being excommunicated by their family.

The marketplace of ideas won’t always work this way, and not everyone is destined to see the light. But restricting speech is a privileged response that neither makes society more equal nor has any tangible benefit other than providing a false sense of justice, which, in the long term, only fuels underlying problems. We cannot afford to be blind to this reality.

None of this should be construed as a plea to accept the status quo or to disengage. Rather, it’s a call for college students who support restricting speech to recognize their own privilege. Education is a gift, and college students should use the privilege it confers to advocate for change. But this means realizing free speech is not the enemy of progress, and that restricting it will not make society more equal. To do otherwise — to restrict and punish speech — is to be so willfully blind to privilege as to become the oppressors.

Chris Marchese is a Senior Financial Analyst at Meritor.

Can Toyota and Reason Overcome Blindness? – Article by Edward Hudgins

April 13, 2016 Edward Hudgins Comments 0 Comment

Edward Hudgins

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If you’ve shut your eyes at the ugly spectacle of political and cultural decline around you, look in the right direction and you’ll see what’s best in the world, including innovations from Toyota that are helping the visually impaired.

Technology helping the blind see

The research department at the world-class auto maker is doing more than designing Priuses. It recently unveiled Project BLAID, a shoulder and neck-worn device that can help guide visually-impaired folks through building interiors with cameras, speakers and other technology. This is just one nice bit of good news in a world where the media is ruled by “if it bleeds, it leads.” This is one of many innovations in a world that is being transformed by exponential technologies.

For example, in January an Australian research team at Monash University announced development of another system to help the blind that it will test soon. It bypasses the eyeball, which is often damaged beyond use in blind people, and uses a pair of glasses that feeds visual data directly into the brain. At this time that technology at best would give blind people very limited vision, only enough to let them maneuver around like the Toyota technology does. But it’s a start.

Technology helping the deaf hear

Let’s remember that in recent decades, some 190,000 deaf individuals have received cochlear implants. These devises do not simply amplify sound as do hearing aids. They translate sound into electrical impulses that directly stimulate the cochlear nerve in the ear so the individuals can hear. It is estimated that around 150,000 children are born each year with hearing impairment so serious that they could benefit from such implants.

So as the costs of these implants decrease, we will see the gradual elimination of the ago-old scourge of deafness just as the blight of blindness will gradually disappear from list of human woes as companies like Toyota continue their work.

Reason as the cure

The proximate cause of all this good news is the exponential increase in information processing capability, usually called “Moore’s law.” Since the mid-1960s the capacities of semiconductors have doubled every eighteen months. A capacity of 1,000 at that time is 2,000,000,000 today. That means not only the advent of laptops, tablets, and smart phones but also medical devises that would have been thought science fiction decades ago.

But what is really behind these achievements is a moral code that treats rationality as our highest virtue and human achievement as our highest purpose. It is a commitment by individuals to objective reasoning and to understanding the world so that they can control it to enhance human life and flourishing. And it is a joy that individuals take in the process of understanding and creating.

Ayn Rand called machines “the frozen form of living intelligence.” Do you want to live in a world from which blindness and other illnesses or physical defeats are banished? Then fight for this morality of reason.

Dr. Edward Hudgins directs advocacy and is a senior scholar for The Atlas Society, the center for Objectivism in Washington, D.C.

Copyright The Atlas Society. For more information, please visit www.atlassociety.org.

Dumb and Dumber – From Negative Interest Rates to Helicopter Money – Article by Paul-Martin Foss

April 12, 2016 Paul-Martin Foss Comments 0 Comment

Paul-Martin Foss

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We’ve all run into someone who thinks that all it take to bring about prosperity is to give everyone a million dollars. If everyone is a millionaire, we’ll all be rich and be able to afford anything we want, or so the thinking goes. Any sound economist knows that wouldn’t be the case, however. If everyone were given a million dollars the increased amount of money chasing the existing stock of goods would merely result in a massive rise in prices. No one would be better off, at least not once prices were once again equilibrated. The concept of giving everyone a million dollars is so absurd that no one takes it seriously. That is, they don’t take it seriously when a million dollars is the proposed amount. When the amount is smaller, all of a sudden it becomes a viable and increasingly-discussed policy proposal: helicopter money.

Ben Bernanke was derided for bringing up the possibility of helicopter money in 2002, although the idea dates back to Milton Friedman. What Bernanke did say was:

Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

In fact, if you read that speech you will see Bernanke touting the effectiveness of policies which the Fed has since tried and failed at, as well some policies which the Fed has not yet tried and which we hope it never will.

As a decade of stimulus, quantitative easing, and zero or below-zero interest rates has now proven to be an absolute failure, helicopter money is once again being discussed as a potential central bank action, by central bankers who have no idea what to do and who are grasping at straws. The chief fixed income analyst at Nordea bank has publicly speculated that the European Central Bank (ECB) might be able to distribute 1,300 euros to each European citizen in a bid to boost inflation.

This bid to boost inflation makes the age-old error of confusing more money and higher prices with greater wealth. We know from our million-dollar example that that isn’t the case. So why try on a small scale what fails at the large scale? It is like the minimum wage debate, in which those who favor boosting minimum wages argue that it will result in workers being better-paid and more well-off. Yet we know that raising the minimum wage will result in some workers losing their jobs, as businesses cannot absorb all the increased costs and must dismiss their least-productive workers. The challenge to the proponents of minimum wages always is, if $15 an hour is so good, why not $15,000 an hour? Well, that’s because such a large increase would make abundantly clear what the minimum wage proponents are trying to hide. Minimum wages make some workers better off, but they do so by forcing other workers out of work, thus their wage falls to $0. In the same way, if the ECB could give 1,300 euros to each person, why not 1,300,000 euros? Because prices would rise in result and quickly negate any short-term benefit gained by the monetary increase. That type of hypothetical question exposes the farce of such handouts.

If helicopter money is implemented, those who first gain the use of the new money may benefit by increasing consumption before prices rise, while others will see prices rise before they are able or willing to use the money. But the end result will be higher prices but no overall increase in welfare. The economy will not see any sort of burst in productivity from a one-shot injection. So what will be proposed next? How about multiple injections of helicopter money over extended periods of time? That would seem to follow.

But again, anticipation and expectation of future injections would not lead to economic growth. It would only serve to further raise prices as new money enters the economy and transfers wealth to those who first use the new money from those who don’t. Economic growth comes not from more money or higher prices, but from savings and investment. No matter where in the economy central bank monetary injections enter, they cannot and will not result in real economic growth.

Zero interest rates didn’t do what central banks thought they would do, so they moved to quantitative easing. QE didn’t do what central banks thought it would do, so they moved or are moving to negative interest rates. Negative interest rates won’t work either so, assuming they don’t completely destroy the banking system beforehand, central banks may very well resort to helicopter money. Guess what, that won’t work either. How much more suffering will central banks have to impose on their countries before people realize that they are monetarily, morally, and intellectually bankrupt?

Paul-Martin Foss is the founder, President, and Executive Director of the Carl Menger Center for the Study of Money and Banking, a think tank dedicated to educating the American people on the importance of sound money and sound banking.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

As Ukraine Collapses, Europeans Tire of US Interventions – Article by Ron Paul

April 11, 2016 Ron Paul Comments 0 Comment

Ron Paul

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On Sunday Ukrainian prime minister Yatsenyuk resigned, just four days after the Dutch voted against Ukraine joining the European Union. Taken together, these two events are clear signals that the US-backed coup in Ukraine has not given that country freedom and democracy. They also suggest a deeper dissatisfaction among Europeans over Washington’s addiction to interventionism.

According to US and EU governments – and repeated without question by the mainstream media – the Ukrainian people stood up on their own in 2014 to throw off the chains of a corrupt government in the back pocket of Moscow and finally plant themselves in the pro-west camp. According to these people, US government personnel who handed out cookies and even took the stage in Kiev to urge the people to overthrow their government had nothing at all to do with the coup.

When Assistant Secretary of State Victoria Nuland was videotaped bragging about how the US government spent $5 billion to “promote democracy” in Ukraine, it had nothing to do with the overthrow of the Yanukovich government. When Nuland was recorded telling the US Ambassador in Kiev that Yatsenyuk is the US choice for prime minister, it was not US interference in the internal affairs of Ukraine. In fact, the neocons still consider it a “conspiracy theory” to suggest the US had anything to do with the overthrow.

I have no doubt that the previous government was corrupt. […] But according to Transparency International, corruption in the Ukrainian government is about the same after the US-backed coup as it was before. So the intervention failed to improve anything, and now the US-installed government is falling apart. Is a Ukraine in chaos to be considered a Washington success story?

This brings us back to the Dutch vote. The overwhelming rejection of the EU plan for Ukrainian membership demonstrates the deep level of frustration and anger in Europe over EU leadership following Washington’s interventionist foreign policy at the expense of European security and prosperity. The other EU member countries did not even dare hold popular referenda on the matter – their parliaments rubber-stamped the agreement.

Brussels backs US bombing in the Middle East and hundreds of thousands of refugees produced by the bombing overwhelm Europe. The people are told they must be taxed even more to pay for the victims of Washington’s foreign policy.

Brussels backs US regime change plans for Ukraine and EU citizens are told they must bear the burden of bringing an economic basket case up to European standards. How much would it cost EU citizens to bring in Ukraine as a member? No one dares mention it. But Europeans are rightly angry with their leaders blindly following Washington and then leaving them holding the bag.

The anger is rising and there is no telling where it will end. In June, the United Kingdom will vote on whether to exit the European Union. The campaign for an exit is broad-based, bringing in conservatives, populists, and progressives. Regardless of the outcome, the vote should be considered very important. Europeans are tired of their unelected leaders in Brussels pushing them around and destroying their financial and personal security by following Washington’s foolish interventionism. No one can call any of these recent interventions a success, and the Europeans know it.

One way or the other, the US empire is coming to an end. Either the money will go or the allies will go, but it cannot be sustained. The sooner the American people demand an end to these foolish policies the better.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

Donald Trump Is the Nightmare Version of a Political Outsider – Article by Lucy Steigerwald

April 4, 2016 Lucy Steigerwald Comments 0 Comment

Lucy Steigerwald

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Trump Is Not an Alternative to Politics as Usual: He Is Its Purest Form

At a CNN-hosted town hall debate, Donald Trump said that the US government’s core focus should be on security (times three!), health care, and education. In spite of this vague, rambling answer, and much other blathering in support of big government, the real estate mogul has a large, intense following, which includes people on the right, the left, and even some paleoconservatives and libertarians.

In some ways, it’s understandable: if the normal process of politics revolts you in any way, the dream of anti-candidate Trump is sweet. The approval rating for the presidency in general is around 30 percent, according to Gallup. For Congress, it’s a stingy eight percent. People — or at least the people Gallup calls — do not seem terribly impressed by their elected officials.

Nor should they be. Powerful men and women spy, meddle, steal, and go to war, whether the people want them to or not, and then pat them on the head and coo euphemisms when people get upset with the results.

Into this travesty strolls Donald Trump, with a terrible, shallow campaign, brilliant in its bombastic vagueness. Populism, it’s been a while. You’re looking tanned, rested, but disturbingly familiar.

When Trump boasts about being against the Iraq war, or disses Dick Cheney, or says that being called a politician is insulting, it’s all too easy to like him. It would be so nice to believe he is not one of them, but one of us. Sure, he’s a billionaire on his third wife, with numerous failed business ventures, a love of eminent domain, and his own brand of “luxury” steaks, but he feels our loathing of the political class.

Yet it is infuriating that this is the year, and this is the man who has stolen the heart of the people fed up with DC. Not someone with principles (such as one against, oh, gleefully saying literally anything to be elected), not someone notably different from the elites he professes to loathe — merely a man who knows how to blab with the purest, most bald-faced confidence ever seen on a national stage.

In one way, Trump’s presidential run is about an outsider group revolting against the status quo, the way that fringey, quixotic campaigns like Pat Buchanan, Dennis Kucinich, or Ron Paul’s were. And some libertarians and paleocons have jumped on the Trump float, but it is clearly not their parade. The cause of Trump is not small government or social democracy or even Catholic populism.

It is Charlie Sheen-esque nationalism. It is strident whining confused for truth-telling. It is nonsense mercantilist ideas, bullying as public policy, and the worst anti-immigrant scapegoating in decades. However, there are no ideas here: it’s merely a billionaire playing that he’s angry about Mexicans and rallying swarms to his meaningless sort of “patriotism.”

Whether Trump was inevitable, or whether he simply speaks to the truly mediocre 2016 candidates is uncertain. But boy is it frustrating that the man who wants to raze DC is the one who wants to erect a statue of himself in its place. He tells it like it is, he knows politicians don’t work for the people! But he’s going to wave his hands and make a Mexico wall and 18th-century trade policy appear by incantation.

Back in September, the New Yorker wrote that “Trump … is playing the game of anti-politics.” We should be so lucky. Trump is merely politics distilled down to the size of one angry rich guy. On the campaign trail, would-be officials swear they can do anything and everything (and in the first 100 days, no less). Trump is bolder, brasher, and even more divorced from reality. But he’s still essentially that. The waking reality of the presumptive GOP nominee — who disses Dick Cheney, Hillary Clinton, and both party establishments — is that he is, heart and soul, a consummate politician.

His critique of the political class is not that they meddle too heavily in the lives of individuals, but that they haven’t done enough. If they had, wouldn’t we have a 50-foot wall on the southern border? Wouldn’t all those manufacturing jobs come back from China? For Trump and his supporters, the problem with Washington is not the inherent disaster of a massive bureaucracy with no consequences for failure and a surplus of corrupting power. No, it’s lack of strident, Trump-like spirit: a lack of will.

In spite of his twitches towards a less militaristic foreign policy — in between suggesting the United States rip up the Geneva Conventions, bomb the hell out of Syria, and seize Iraq’s oil — there is nothing really consistent about Trump. He may or may not be worse in practice than the status quo, but there is no reason to suspect that he is the savior of anything except his own ego. Indeed, his view that the government is incompetent due to bad managers sounds more like progressive technocracy than anything conservative. But somehow his screaming fans have gotten their signals crossed or, more grimly, they are as disinterested in small government as he is.

Hating DC is fun, but it doesn’t magically translate to supporting liberty. And populism is a not principle — it has no policies, feasible or otherwise. It is raw emotion. It is preaching. It is the flimflam, finger-pointing, and impossible promises of traditional assembly-line politics, just stripped down to bare parts. Trump is the schoolyard version of everything Marco Rubio or Bill Kristol advocates. He isn’t flattering anyone’s intelligence with his policy acumen. He doesn’t think we’re terribly smart, but he also thinks those fancy pants DC elites are not as smart as they pretend. He’s right about all of that. It’s not as if politics is noble or deserves better than Trump. It is Trump.

The Donald is not some demon summoned from another dimension to destroy America. He probably isn’t a new Hitler or Mussolini. He is a part of us, a glitzy, gilded reflection of the dark soul of politics: the lies, the self-promotion, and the delusion. Take a good, long look.

Lucy Steigerwald is a contributing editor to Antiwar.com and a contributor to Playboy; she previously worked as an Associate Editor for Reason magazine. Her articles have appeared at Playboy, Vice, Antiwar, Reason, Pittsburgh City Paper, the Pittsburgh Tribune-Review, and various libertarian blogs.

Vietnam War at 50: Have We Learned Nothing? – Article by Ron Paul

April 4, 2016 Ron Paul Comments 0 Comment

Ron Paul

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Last week Defense Secretary Ashton Carter laid a wreath at the Vietnam Veterans Memorial in Washington in commemoration of the “50th anniversary” of that war. The date is confusing, as the war started earlier and ended far later than 1966. But the Vietnam War at 50 commemoration presents a good opportunity to reflect on the war and whether we have learned anything from it.

Some 60,000 Americans were killed fighting in that war more than 8,000 miles away. More than a million Vietnamese military and civilians also lost their lives. The US government did not accept that it had pursued a bad policy in Vietnam until the bitter end. But in the end the war was lost and we went home, leaving the destruction of the war behind. For the many who survived on both sides, the war would continue to haunt them.

It was thought at the time that we had learned something from this lost war. The War Powers Resolution was passed in 1973 to prevent future Vietnams by limiting the president’s ability to take the country to war without the Constitutionally mandated Congressional declaration of war. But the law failed in its purpose and was actually used by the war party in Washington to make it easier to go to war without Congress.

Such legislative tricks are doomed to failure when the people still refuse to demand that elected officials follow the Constitution.

When President George H. W. Bush invaded Iraq in 1991, the warhawks celebrated what they considered the end of that post-Vietnam period where Americans were hesitant about being the policeman of the world. President Bush said famously at the time, “By God, we’ve kicked the Vietnam Syndrome once and for all.”

They may have beat the Vietnam Syndrome, but they learned nothing from Vietnam.

Colonel Harry Summers returned to Vietnam in 1974 and told his Vietnamese counterpart Colonel Tsu, “You know, you never beat us on the battlefield.” The Vietnamese officer responded, “That may be so, but it is also irrelevant.”

He is absolutely correct: tactical victories mean nothing when pursuing a strategic mistake.

Last month was another anniversary. March 20, 2003, was the beginning of the second US war on Iraq. It was the night of “shock and awe” as bombs rained down on Iraqis. Like Vietnam, it was a war brought on by the US federal government’s lies and propaganda, amplified by a compliant media that repeated the lies without hesitation.

Like Vietnam, the 2003 Iraq war was a disaster. More than 5,000 Americans were killed in the war and as many as a million or more Iraqis lost their lives. There is nothing to show for the war but destruction, trillions of dollars down the drain, and the emergence of al-Qaeda and ISIS.

Sadly, unlike after the Vietnam fiasco there has been almost no backlash against the US empire. In fact, President Obama has continued the same failed policy and Congress doesn’t even attempt to reign him in. On the very anniversary of that disastrous 2003 invasion, President Obama announced that he was sending US Marines back into Iraq! And not a word from Congress.

We’ve seemingly learned nothing.

There have been too many war anniversaries! We want an end to all these pointless wars. It’s time we learn from these horrible mistakes.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

The Myth of Primitive Communism – Article by Mike Reid

March 29, 2016 Mike Reid Comments 1 comment

Mike Reid

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Generosity Is an Investment in Human Capital

All my students starved to death. Again.

Here’s what they learned the hard way: generosity today can be a way of saving for tomorrow.

They were survivors of a plane crash on a desert island. They knew they’d be trapped there for months and that the only food would be the large but elusive fish in the sea.

When one of my students managed to catch a fish, he ate as much as he could, then stored the rest for himself under some rocks near the beach.

Other students, less successful as fishermen, starved to death promptly.

Soon, the initially successful fisherman found himself alone on the island. With no refrigeration, the food he’d stashed rotted away. And when he ventured out fishing again, he was unlucky and got stung by a deadly jellyfish.

With no one left to take care of him, he, too, perished.

Every year, I play this game with my students. We use a big square of desks to represent our island, pennies to represent fast-decaying fish fillets, and dice to randomize the fishers’ success or failure. (If a student decides not to fish, he has no chance to catch food but also no chance of encountering the dreaded jellyfish.)

“Primitive Communists”
We play this game while studying the famous Ju/’hoansi hunter-gatherers. Until the colonial encroachments of the 20th century, most Ju/’hoansi lived in small, nomadic groups in the Kalahari desert, the men hunting with bows and arrows and the women collecting nuts, berries, and roots with digging sticks and carrier sashes.

Every year, in the discussions that follow our brief reading on this culture, my students remark with amazement that whenever a Ju/’hoan man or woman finds food, he or she shares it widely with the community.

This behavior seems to be an important part of why Richard B. Lee, the most prominent anthropologist in the study of the Ju/’hoansi, describes them as “primitive communists” in the Marxian sense. And many of my students each year seem to get the idea that the Ju/’hoansi share their food so freely with each other because they are in some way more charitable, more natural, or otherwise more moral than us.

Sometimes, a student remarks, “That’s like socialism, right?”

So I like to play this little starvation game to disabuse my students of their romantic notions about communist noble savages in the African wilderness.

What, I ask, would happen if a bunch of greedy, selfish people like us found themselves in the same economic situation the Ju/’hoansi face?

The Economic Constraints of Foraging Life
Nomadic foragers like the Ju/’hoansi have unreliable “incomes” in terms of the food they find from day to day and week to week.

They are often masterful trackers and foragers. But, no matter how competent you are, when you pursue a giraffe on foot with a bow and arrow, sometimes the giraffe gets away.

Furthermore, it’s difficult for nomadic foragers to store food or other forms of material wealth. In fact, the Ju/’hoansi are even less inclined to store food than many other nomadic foragers. Perhaps this is because, while they can dry meat to last a couple of months, they also know a sudden rainstorm could ruin their savings. And because they travel repeatedly over the year to new water holes and food sources, as Lee says, “it would be sheer folly to amass more goods than can be carried along when the group moves.”

So if one were to ask a Ju/’hoan man in the morning what he’s going to eat that night, he could honestly respond, “I don’t know; I haven’t caught it yet.”

Cultural Heritage and Human Survival
Every year, in the game with my students, one of two things happens:

Successful fishermen imitate the Ju/’hoansi. They give away their excess food freely, starting with their friends or closest neighbors at the game table.
The students starve to death en masse.

My students tend to go into this game with an idealistic view of the Ju/’hoansi as selfless, altruistic people.

They tend to finish the game realizing that, even if you were the greediest, most selfish nomadic forager in the world, your best move would still be to share food with your neighbors.

Since nomadic foragers have a difficult time storing physical capital, especially food, their response all around the world, in culture after culture, is to promptly turn it into human capital by giving it to friends, relatives, and neighbors.

Like my students, Ju/’hoansi men and women are tempted to hoard their own wealth. Indeed, Ju/’hoansi elders often lament that they have given generously all their lives and would now like to keep just a little for themselves.

But the Ju/’hoansi also have a massive corpus of gift-exchange rituals, conversational habits, and even stock jokes that they use to bolster their own patience and to bring hoarders peacefully into line. These behaviors represent the heritage of thousands of years of spontaneous-order cultural development under economic conditions in which short-run greed is tantamount to stupidity.

What makes the Ju/’hoansi seem selfless, or communistic, or morally superior to us is their age-old cultural adaptation to the fact that, for each individual in their situation, the best strategy to save for the future is to share widely in the present.

Culture and Markets
In the very different economic and technological circumstances of the industrialized West, we have our own roundabout methods by which our selfish desires lead to social prosperity. In markets, each of us can still provide best for his or her own future by helping others — especially strangers — for the right price.

Would this same system work for hunter-gatherers?

If a group of 19th-century Ju/’hoansi equipped with digging sticks and bows and arrows had tried the ethics of the modern market for themselves, many might have starved to death before they recognized their error and began to recreate a culture more appropriate to their own ecology and technology.

But what works for the Ju/’hoansi would be devastating for us. If we today, in a market society made up largely of strangers, attempted to practice the ethics of profligate sharing and meek humility — or even worse, to enforce such ethics on noncompliant others through government policies — we would drive our whole society into chaos and penury.

The Ju/’hoansi’s strategy works only for people in the Ju/’hoansi’s situation.

Our own great wealth and our own social order are built on savings and investment — and on using our resources to benefit strangers through market exchange.

Mike Reid is a publishing consultant at InvisibleOrder.com and the publications impresario at Liberty.me. He also teaches anthropology at the University of Winnipeg. Mike lives in Manitoba with his wife and two children.