Austrian Economics
When Magic Bullets Fail
I recently read an article written by former Fed economist Richard Alford over at Naked Capitalism. He focused his criticism on the zero interest rate policy (ZIRP) currently deployed by the Fed under the watch of Chairman Ben Bernanke. There has been increasing noise surrounding ZIRP and more mainstream suggestions that interest rates were too low for too long between 2001 and 2006.

Alford’s article gets into quite a bit of detail, but it is worth a read if you enjoy geeky economics stuff. Mainstream macroeconomists believe that the economy can be explained and managed with mathematical formulas. In fact, the formulas are really quite simple and do not capture the dynamics of the millions of “irrational” actors therein. One favorite is the Taylor rule which suggests a target for the Fed funds rate - the key interest rate set by the central bank. Alford points to a Taylor op-ed which states that rates were too low from 2002-2005.
Bernanke has suggested that rates necessarily had to be low (and must stay low) to fend off the threat of deflation. When analyzing Bernanke’s definition of deflation, however, Alford suggests deflation was never a threat. Thus, interest rates were lower than they “should have been” for no good reason.
Economic Depressions Don’t Exist Under Totalitarian Systems
So contends Lev Nazrozov. He writes:
Out-of-control predatory capitalists have perpetrated a worldwide economic depression. Capitalism’s degenerate character is now extraordinarily visible during this time of multiple crises.
On each side of the page there is a picture of a miserable emaciated proletarian who carries on his back a huge pack of money, with a bourgeois seated atop of the pack and smoking a cigar.
By simply allowing the government to dominate every sector of the polity, by embracing totalitarianism, we might be able to avoid the woes of economic recession? Historical study makes such a conclusion seem ridiculous. While totalitarian economies did not suffer from “depressions”, per se, one could argue that consumers and citizens lived under a system which continuously mimicked the effects of depression.
Austrian Scholar’s Conference 2009
Every year the Ludwig von Mises Institute in Auburn, AL hosts a conference for scholars of the Austrian tradition to come together and share essays and ideas. This year’s conference was loaded with big names and reputable authors among the Libertarian and generally liberty-minded.
Say Goodbye to the American Dream
Most of us have seen the passionate speech given by George Baily in It’s a Wonderful Life to the evil bank-owner, Mr. Potter, begging for leniency towards Potter’s delinquent homeowners and espousing why owning a home makes the residents of Bedford Falls better citizens and more productive members of society.
Mr. Potter is simply interested in making sure his payments are received on time and that foreclosures are issued to those who fall behind. He believes, and rightly so, that if a man has overextended himself and cannot pay his bills, the mortgage owner has the right to claim the house and boot the residents out.
George Baily, however, is more interested in promoting the “American Dream”- home ownership- and has built his life and Savings and Loan business around helping families buy homes… even if they’re not quite ready to take on that financial responsibility.
Two polls show Americans don’t trust government with liberties or money
CNN is out with a new poll that shows Americans don’t trust the government when it comes to safeguarding their rights, and rightfully so:
A majority of Americans think the federal government poses a threat to rights of Americans, according to a new national poll.
Fifty-six percent of people questioned in a CNN/Opinion Research Corporation survey released Friday say they think the federal government’s become so large and powerful that it poses an immediate threat to the rights and freedoms of ordinary citizens. Forty-four percent of those polled disagree.
The survey indicates a partisan divide on the question: only 37 percent of Democrats, 63 percent of Independents and nearly 7 in 10 Republicans say the federal government poses a threat to the rights of Americans.
Some would say that this is paranoia, but it’s not. Over the last several years, we’ve seen a dismantling of the Bill of Rights through restrictions on speech, attempted restrictions on the Second Amendment (Heller was a rare victory), a running over of the Fourth and Fifth Amendments, which guarantees the right to privacy, due process and private property. There is also no protection of economic liberty by government anymore.
Why “stimulus” doesn’t work
John Stossel explains the broken window fallacy:
On Government, Chris Matthews Just Doesn’t Get It
In this bizarre clip, MSNBC host Chris Matthews illustrates well how inefficient government is. In the capital of the most powerful country in the world, snow can’t be plowed and citizens (including myself) are finding themselves ripping through mounds of snow on their own to get where we need to be.
I can tell you from experience that Washington D.C. is a living testament to how inefficient government is. Do not let the glamorous photos of the president in front of the White House fool you - Washington is a depressing town, filled with depressingly unkept federal buildings that look like they haven’t been cleaned in decades and a bureaucracy that is comically inefficient. Getting books from the Library of Congress made dealing with public school administrators look like a trip to the grocery store.
Unfortunately, the logical conclusion doesn’t follow for Chris Matthews. He says instead that he “believes in government” and says the D.C. government should catch the sort of heat that Bush got for his timid response to Hurricane Katrina. Oh well.
Elections, And Why The American Economy Will Collapse
I know what you’re thinking: man that Pete is a positive guy. I like to describe myself as realistic, with a bit of fatalism throw in. Either way, I find it hard to look at the economic landscape and have any hope. It is especially dreadful when politicians have to get re-
elected, AND said politicians consult certain “economists”.
Economists have for years looked at what is happening in a society and sought to come up with solutions as to how an economic crisis can be “fixed”. The problem is, like in all fields, you have good economists, and you have the not so good (The latter seem to be the ones that always find their way onto the public payroll).
In extremely broad terms economists can be split into two categories:
in the future; AND what it does for not only one segment of society,
but the whole.
2. The “bad” economist does the exact opposite; they examine only what
will fix the present issue and usually concentrate on only one segment of
the population.
If you are a student of American history your eyes should be opening as to which economist is most often chosen by our elected officials. The real question is “why”?
Well, why wouldn’t a politician pick economist #2?
Who Hijacked American Foreign Policy?
Way back in July of 2003 Ron Paul wrote an article entitled “We’ve Been Neo-Conned” in which he laid out facts showing that the “Neo-Con” philosophy had taken over the foreign policy of the USA (For a quick primer on the Neo-Conservative movement please click the link above). As I was reading this article one question kept repeating in my head:
“How did it come to this?”
The only place to start I believe is with the American person (notice I didn’t use the plural “people”). I will use myself as an example since I believe my story is common to many modern-day libertarians and members of the Liberty movement.
In short, I was raised a Reagan Republican, became a Neo-Con after 9/11, converted to a Goldwater conservative after the invasion of Iraq and became a full-fledged libertarian after finding the writings of Murray Rothbard(OK, maybe every libertarian didn’t become one because of Murray but I think many have a similar story).
But here is what I believe is key in my story and the reason why there aren’t more capital “L” Libertarians: I didn’t get their foreign policy. Like many I actually referred to myself as libertarian on social and monetary issues, but not when it came to our “enemies”. I hear the same from freedom loving people over and over again, especially in the wake of 9/11.
The reason the Neo-Cons were able to seize power is FEAR. I am not putting anybody down because of it. I can certainly relate, but we still have to figure out why the American person is allowing our government todrop bombs and declare war on anybody they want to while we cheer them on. When does fear translate to lunacy?
A Financial New Year’s Resolution
It’s that time of year again, when we all make resolutions to change something that we do for the betterment of ourselves. Here’s a resolution everyone should adopt: Move Your Money to a local bank and/or credit union.
It’s our money and we can choose to move it where we wish. Remember in It’s a Wonderful Life, how George Bailey stands up to Mr. Potter? We don’t have to deal with these big banks, let’s put our money in the Bailey Building and Loan.
The idea is simple: If enough people who have money in one of the big four banks move it into smaller, more local, more traditional community banks, then collectively we, the people, will have taken a big step toward re-rigging the financial system so it becomes again the productive, stable engine for growth it’s meant to be.

United Liberty








