A study from, Econ Journal Watch, was recently published and it discusses whether economists change their viewpoint on budget deficits when the White House changes political parties. The author, Brett Barkley, analyzed a specific group of economists by;
“….examined statements from 17 economists from 1981 through 2009, and gauged the consistency of their stances on deficit spending and reduction during Republican and Democratic administrations.
According to the study, Krugman was the only economist of the 17 to “significantly” change his stance on the federal budget deficit for partisan reasons.”¹
This is no surprise to me, after all, Krugman does suffer from post traumatic nobel prize irrelevance. Below is a excerpt from Barkley’s study;
During the administration of George H.W. Bush, Krugman opposed budget deficits:
Longer term, the war may well hurt the US. By raising the federal budget deficit, Operation Desert Storm will crowd out some investment in the US economy, which has the lowest saving and investment rates in the industrial world. (Krugman 1991)
A year later, during the 1992 presidential campaign he changed his tune, perhaps to accommodate Clinton policies:
If a President can save $1 billion through feasible cuts in spending or raise $1 billion by taxing high-income families, should that money be used to reduce the deficit or help repair bridges and finance Head Start? Mr. Clinton’s answer is that investments should have first priority. He’s right. (Krugman 1992)
Krugman commented seven times during the Clinton administration. Five of those comments occurred during the 1996 campaign season, in which Krugman primarily criticized Republican policy regarding the budget deficit. Approximately 71% of his comments occurred during the second Bush administration. Beginning in 2003, the year of the Iraq insurgency, Krugman opposed budget deficits strongly and frequently. Thirty-one of his ninety-nine comments came in 2003.
To add to Krugman’s absurdity, he has this to say as a possible remedy to Greece’s economic condition;
“First, Greek workers could redeem themselves through suffering, accepting large wage cuts that make Greece competitive enough to add jobs again.”²
I wonder why he did not offer such insight to President Obama? Krugman’s hypocrisy and self-exaltation make it difficult to recognize any benefit he may provide to the field of economics, and I won’t hold my breath to see if he changes.
¹ From Lachlan Markay’s article, Paul Krugman Is Nation’s Most Partisan Economist, Study Finds.
² From Paul Krugman’s OP-ED column in The New York Times.
This is a short post to inform you that I recently purchased two books from the Ludwig von Mises Institute store, The Law by Frederic Batiat, and Elementary Lesson in Logic by William Stanley Jevons. Below is a description of each book, which can be found at the Mises store.
Many of you don’t know, but I have been working on an e-magazine. The first issue should be ready by May 15th, and then the second on July 15th (and so on). In the July 15th piece I will submit my review of The Law, I hope you find it interesting.
How is it that the law enforcer itself does not have to keep the law? How is it that the law permits the state to lawfully engage in actions which, if undertaken by individuals, would land them in jail?
These are among the most intriguing issues in political and economic philosophy. More specifically, the problem of law that itself violates law is an insurmountable conundrum of all statist philosophies.
The problem has never been discussed so profoundly and passionately as in this essay by Frederic Bastiat from 1850. The essay might have been written today. It applies in ever way to our own time, which is precisely why so many people credit this one essay for showing them the light of liberty.
Bastiat’s essay here is timeless because applies whenever and wherever the state assumes unto itself different rules and different laws from that by which it expects other people to live.
And so we have this legendary essay, written in a white heat against the leaders of 19th century France, the reading of which has shocked millions out of their toleration of despotism. This new edition from the Mises Institute revives a glorious translation that has been out of print for a hundred years, one that circulated in Britain in the generation that followed Bastiat’s death.
This newly available translation provides new insight into Bastiat’s argument. It is a more sophisticated, more subsantial, and more precise rendering than any in print.
The question that Bastiat deals with: how to tell when a law is unjust or when the law maker has become a source of law breaking? When the law becomes a means of plunder it has lost its character of genuine law. When the law enforcer is permitted to do with others’ lives and property what would be illegal if the citizens did them, the law becomes perverted.
Bastiat doesn’t avoid the difficult issues, such as why should we think that a democratic mandate can convert injustice to justice. He deals directly with the issue of the expanse of legislation:
“It is not true that the mission of the law is to regulate our consciences, our ideas, our will, our education, our sentiments, our sentiments, our exchanges, our gifts, our enjoyments. Its mission is to prevent the rights of one from interfering with those of another, in any one of these things. Law, because it has force for its necessary sanction, can only have the domain of force, which is justice.”
More from Bastiat’s The Law:
Socialism, like the old policy from which it emanates, confounds Government and society. And so, every time we object to a thing being done by Government, it concludes that we object to its being done at all. We disapprove of education by the State — then we are against education altogether. We object to a State religion — then we would have no religion at all. We object to an equality which is brought about by the State then we are against equality, etc., etc. They might as well accuse us of wishing men not to eat, because we object to the cultivation of corn by the State.
How is it that the strange idea of making the law produce what it does not contain — prosperity, in a positive sense, wealth, science, religion — should ever have gained ground in the political world? The modern politicians, particularly those of the Socialist school, found their different theories upon one common hypothesis; and surely a more strange, a more presumptuous notion, could never have entered a human brain.
They divide mankind into two parts. Men in general, except one, form the first; the politician himself forms the second, which is by far the most important.
Bastiat concludes his penetrating analysis with this:
The social organs are constituted so as to enable them to develop harmoniously in the grand air of liberty. Away, then, with quacks and organizers! Away with their rings, and their chains, and their hooks, and their pincers! Away with their artificial methods! Away with their social laboratories, their governmental whims, their centralization, their tariffs, their universities, their State religions, their inflationary or monopolizing banks, their limitations, their restrictions, their moralizations, and their equalization by taxation! And now, after having vainly inflicted upon the social body so many systems, let them end where they ought to have begun — reject all systems, and try of liberty — liberty, which is an act of faith in God and in His work.
This special Mises Institute edition is priced for the largest possible distribution. Whether you buy one or one hundred, you can look forward to one of the most penetrating and powerful essays written in the history of political economy.
And not only Hazlitt. William Stanley Jevons’s book was the seminal contribution that educated many generations of English and American scholars that crucial discipline of logic. It teaches the rules for thinking. Now, this was a subject that every student once had to take, and not in college but quite early in life, and certainly by high school.
No more. Today, it is widely assumed that there is no structure of thinking that is worth studying. And perhaps that explains why serious thinking is so rare. It is nothing short of astonishing that most people go all the way through school with no exposure to logic at all.
We’ve long looked for a good text to bring into print. Jevons, one of the architects of the Marginal Revolution, is a great choice.
To be sure, this book is not easy. It takes patience and discipline. It offers a great challenge to anyone. However, if you can go through the book and learn from it, you will have a massive advantage over colleagues, most of whom have never studied this area.
Does it make sense that an economics publishers would bring out a book on logic? Certainly it does from a Misesian point of view. Logic is the method of economic thinking. Without it, indeed, economic theory is not possible.
May Jevons school the current generation in the way he did so many previous ones.
I am quite sure that most of you are aware of George Will’s masterful dissection of Bill Maher’s statement;
“I could criticize America in general for not attacking this problem [dependency on fossil fuels] in the Seventies. I mean, Brazil got off oil in the last thirty years we certainly could’ve.”
If not, I have provided a video of the interaction from ABC’s, “This Week.” I have also provided some statistical data that illustrates Brazil’s consumption and production of oil.
From the EIA: According to the Oil and Gas Journal (OGJ), Brazil had 12.6 billion barrels of proven oil reserves in 2009, second-largest in South America after Venezuela. The offshore Campos and Santos Basins, located on the country’s southeast coast, contain the vast majority of Brazil’s proven reserves. In 2008, Brazil produced 2.4 million barrels per day (bbl/d) of oil, of which 76 percent was crude oil. Brazil’s oil production has risen steadily in recent years, with the country’s oil production in 2008 about 150,000 bbl/d (6 percent) higher than 2007.
There isn’t much difference between 2005 and 2006, and while the percentage of oil consumption includes fuel ethanol, it is clear that Brazil did not “get off” oil. Bill Maher also conveniently forgot the following;
From The Wall Street Journal:
“Unfortunately, the Obama Administration is financing oil exploration off Brazil.
“The U.S. is going to lend billions of dollars to Brazil’s state-owned oil company, Petrobras, to finance exploration of the huge offshore discovery in Brazil’s Tupi oil field in the Santos Basin near Rio de Janeiro. Brazil’s planning minister confirmed that White House National Security Adviser James Jones met this month with Brazilian officials to talk about the loan.
“The U.S. Export-Import Bank tells us it has issued a “preliminary commitment” letter to Petrobras in the amount of $2 billion and has discussed with Brazil the possibility of increasing that amount. Ex-Im Bank says it has not decided whether the money will come in the form of a direct loan or loan guarantees. Either way, this corporate foreign aid may strike some readers as odd, given that the U.S. Treasury seems desperate for cash and Petrobras is one of the largest corporations in the Americas.”
It seems that Maher, for far too long, has spouted his rhetoric without the benefit of an intelligent rebuttal. Clearly Mr. Will is beyond Maher on practically every intellectual plane, so how does Maher respond? With the corresponding answer;
“I want to make sure I read that, I know I didn’t just dream that.”
And he has the audacity to call the American people dumb? Brad Schaeffer sums it up perfectly;
“One gets the feeling that Maher himself is just smart enough to paradoxically understand how much of a fool he looked at the hands of Will–who in turn actually appeared to be enjoying helping Maher self-destruct.
“So thank you Bill Maher for exposing yourself on a national stage as the ideologically pompous but intellectually vacant pontificator you are. It must have been a gut-wrenching moment when you were actually challenged to back up your outlandish assertions and accusations against the right you make so freely on HBO. George Will showed that, though you may be a star in the far-left sky, you are not even ready for the minor leagues of informed (key word) political discourse…let alone “the show.” Your rants against conservative ‘ignorance’ have been revealed today for what they are: the pot calling the tea kettle black! And one thing is for sure. George Will’s beloved Chicago Cubs have a better shot at winning the World Series than he does of ever being invited to appear as a panelist on Real Time.”
The following video was taken from WPIX.com. It is an interview between Marvin Scott and Congressman Charlie Rangel. Rangel provides further evidence that politicians are unctuous and abide in a natural state of duplicitousness.
Since the deadline is almost hearing for filing taxes, I figured you would appreciate the following article from Jacob Hornberger.
With April 15 almost upon us, this would be a good time to remind ourselves of how the income tax contributed to the destruction of American liberty.
We should first keep in mind that with the exception of the Civil War, the American people lived without an income tax from the beginning of the United States until 1913, when the 16th Amendment was adopted.
This was not an accident. Americans living during that period of time understood that freedom and an income tax were contradictory notions. If people wanted to live in a free society, it would have to be a society in which government was prohibited from levying taxes on income. Conversely, if people wanted to live in a society in which government is taxing income, then the price they pay is the loss of freedom.
In an income-tax free society, everyone is free to keep the fruits of his earnings. He keeps everything he earns. He is free to accumulate unlimited amounts of wealth. He is free to do whatever he wants with his own money.
And there is nothing the government can do about it because the government is prohibited from taking any portion of a person’s income from him.
There is no IRS. There are no income-tax returns. There are no deductions to keep track of. There is no need to keep records.
There is no withholding tax.
Again, everyone simply keeps everything he earns and decides for himself how to spend it, invest it, donate it, or otherwise dispose of it.
This is what Americans once believed was an absolute prerequisite to a free society. That’s why Americans lived without an income tax for more than 100 years.
Everything changed in 1913, when socialist ideas were being imported from Europe into the United States. That was the watershed year, the year that brought into existence what would become the twin jugular veins for the welfare state and warfare state — the income tax and the Federal Reserve System.
From that date forward and continuing through today, Americans would be coerced, on pain of fine and imprisonment, into sending some governmentally imposed percentage of their income to the IRS.
The magnitude of that change cannot be overstated, for it actually inverted the historical relationship between the American people and the federal government.
Prior to the enactment of the income tax, the relationship between the citizen and the government was one of master and servant. The citizen, who was free to accumulate unlimited amounts of wealth, was sovereign because there was nothing the government could do to interfere with that process. The government was the servant.
The nature of that relationship fundamentally changed in 1913. With the enactment of the income tax, the citizen became the servant and the federal government becoming his master.
How was this so? The income tax effectively nationalized people’s income, in that it placed everyone’s income at the disposal of the government. While before, government lacked the power to take any portion of people’s income, now it wielded the power to take any or all of their income. It all depended on the specific percentage that the government required people to send to the IRS.
Sometimes the government is nice and sets a lower percentage. Sometimes it’s not so nice and sets a higher percentage. But what matters with respect to freedom is not the particular percentage that is set but rather the fact that the government has the power to set the percentage. By having that power, the amount of income that the government permits people to keep effectively becomes akin to an allowance that a parent permits his children to have.
As April 15 rolls around once again, let us remind ourselves what Jefferson stated in the Declaration of Independence: that everyone has been endowed with certain unalienable rights, including the right to life, liberty, and property. For more than 100 years, Americans understood that such natural, God-given rights encompassed the right to accumulate unlimited amounts of wealth and the right to decide what to do with that wealth.
Too bad 20th-century Americans consigned themselves and their successors to a life of subservience and servitude by abandoning the income-tax-free heritage of their ancestors and making the income tax a permanent feature of American life.
Jacob Hornberger is founder and president of The Future of Freedom Foundation.
In The New York Times today there is an article that discusses Harry Reid’s intentions to “take up” immigration overhaul. In plain, terse language this means the following; “my chance at re-election is so poor that I have to prostitute myself to a large demographic, thereby securing the votes needed to win another term.”
From The New York Times;
“We’re going to come back, we’re going to have comprehensive immigration reform now, Reid stated.”
“We need to do this this year,” Mr. Reid said, drawing cheers from the crowd, which included many Latinos. “We cannot wait.”
“We’re going to pass immigration reform, just as we passed health care reform,” Mr. Reid said in a five-minute speech.”
It is obvious that immigration reform is needed, but it is also clear that Reid desperately needs these votes. While it is true that he, along with his political party, are ideological legislators, I sincerely doubt his efforts are altruistically infused. It’s self-preservation.
From The New York Times;
He outlined legislation that would include border security measures and a temporary guest worker program for future immigrants. To gain legal status, illegal immigrants would face “a penalty and a fine, people will have to work, stay out of trouble, pay taxes, learn English,” he said. “It’s not so bad, is it?” he asked the crowd.
So here are my questions;
- Unemployment is high, so how do you rationalize immigration reform when millions of legalized citizens are pressing to find work? Logistical considerations have to be addressed.
- If they can’t find work, how can they pay their penalty fees and their taxes?
- If learning English is a requirement, how will the infrastructure be set up to implement language courses? Will the attendee have to pay, or are the services free? If they are free, does this mean the taxpayer will foot the bill?
It is no secret that I dislike Reid, his representational qualities are flaccid and ineffectual – the vacancy of his intellectual ability becomes readily apparent once you hear him speak. Those that desire his re-election seek to maintain the injection of entitlements, the erroneously perceived ideal that procuring a “thing” from the government is free. My concern is that the Democrats will ram immigration reform through just like their health care overhaul, only to find out later that it is a Pandora’s box of unforeseen problems.