Archive for the Political Rant Category

Is Extremism Always a Bad Thing?

Posted in Political Rant with tags , , , , , , on June 13, 2009 by lilburtonboy7489

Since my alternative Comedy Central is Fox News, I was watching some Glenn Beck tonight. While apparently drunk (as usual), he was attempting to defend conservatives from claims of extremism.

Now I’m not one to care about these idiotic debates which take place for the sole purpose of entertainment, I do care about the underlying question: Is extremism bad?

Most people would agree that all things are good in moderation. Drinking, playing video games, smoking pot, watching TV, eating, and millions of other activities are not necessarily harmful if done in moderation. This moderation is the cornerstone of the virtue ethics of Aristotle.

But isn’t it possible that moderation is not always a good thing? Maybe extremism can be a good thing.

Take the abolitionists for example. Is it better to be a moderate abolitionist who is willing to make compromises for the sake of moderation? Perhaps it would be better to take drastic measures to ensure the abolition of slavery as quickly as possible.

How about helping other people? Is it better to balace this act with other less important things, or is it better to upset the balance at any opportunity? Is it better to oppose a great evil (such as the state) only to the extent which you can be considered a moderate, or is it better to oppose great evil with all your ability?

I don’t care about Glenn Beck’s insane views, but he should learn defend the right claims and look for faulty premises (like the assumption that extremism is intrinsically evil). Maybe if he took a logic class or two, he would be more effective at spreading his bullshit.

Since the ad hominem fallacy allows me to take quotes from any individual regardless of their record, their believes, or character, I will leave you with a quote from Barry Golwater: “I would remind you that extremism in the defense of liberty is no vice. And let me remind you also that moderation in the pursuit of justice is no virtue.”

IHS, CATO, and why libertarians suck.

Posted in Political Rant with tags , , , , , , , on March 14, 2009 by lilburtonboy7489

If you have ever argued with a libertarian, there are two things which will immediately strike you as odd: 1) They are the only people who are more smug than liberals 2) They seem to have some deep hatred for government.

However, the libertarian philosophy is deeply flawed in it’s philosophy of rights. Libertarians do not truly hate the state, but only when it is convenient to do so. The easiest way to expose a libertarian’s trust in the state, is to argue for private defense.

I was recently at an IHS seminar in Santa Cruz, and I was stunned by the way I was attacked by these “anti-government” folk. I thought I was going to a conference which was in the tradition of Mises, Rothbard, Etc… After all, both IHS and CATO were founded to advance the radical ideas of Rothbard.

Boy, was I ever wrong.

I realized that I was in the wrong place. It hit me when I discovered that all of the lectures were not idealogical by any means. Instead, every lecture was about how we should work within the system to incrimentally reduce government. While I am not necessarily opposed to gradualism, I can only support it when the ultimate goal is the abolition of the state.

In discussion groups, we would not talk about how we should legalize drugs, get rid of the police state, or remove all regulations in the economy. Instead, we talked about sensible drug policies, making eminent domain used less often, and changing regulations to allow the market to operate more efficiently.

The goal of these institutions (which used to be used for the advancement of Austrian economics and demonstrate why the state is the greatest evil) is no longer the goal held by Rothbard or any radical. Instead, they are just pragmatic people who are no longer dedicated to the abolition of the state, but rather making the state better. The state is no longer the mass murdering thief that it used to be. It is now an obstacle to prosperity, which should be controlled, not abolished. It is no longer immoral, but rather impractical.

So I figured that these seminars were filled with disappointed people like me. Once again, Iwas wrong.

When we would get into our group discussions, I was ridiculed for having “radical” beliefs. I soon discovered that these “libertarians”, don’t hate government, they are simply annoyed with it.

But maybe they aren’t even annoyed with it. These same people who claim that government does more harm than good instantly worship the state whenever topics such as law or defense come into play. When I said that government has no role in society, everyone quickly jumped to those topics. They could not figure out how this could work. Government is absolutely necessary, private companies could not possibly be up to such a task. It would be absolute chaos.

So notice two things here: 1) There is no talk of right or wrong. 2) How come the government always makes things worse and the market is always better, yet when it comes to this, it is the exact opposite?

Every conversation consisted of “how will that work?” rather than “is that right or wrong?”. The morality has been completely removed from their arguments. The discussions had nothing to do with natural rights, but instead were composed of utilitarian claims based on how the government is impractical.

I won’t say that I gained nothing from this experience, but if this is the direction of the libertarian movement, I’m no longer on board. There were a couple bright people there, but most of the students were just repeating what they have read on the CATO blog. They were just looking for opportunities for internships at CATO and other institutions. The knowledge of the students was very shallow, especially that of Austrian economics and natural rights philosophy. If you ask them about trade in Armenia, they can talk for hours. Beyond that, it was weak.

Some students were on fire for hatred of government, but this was all they had. Passion without knowledge is useless. However, I would much rather have passionate libertarians than libertarians with no principles. The only other passion that I saw, was the hatred for Lew Rockwell, Murray Rothbard, and the Mises Institute.

Another random fact, is that I only heard the word “liberty” 3 times at a week long libertarian conference. I think I’ll be looking for a seminar with either the Mises Institute or FEE next summer. No more IHS.

Fractional Reserve Banking Problem

Posted in Political Rant with tags , , , on January 12, 2009 by lilburtonboy7489

A city decides that it wants to build a bridge. So it hires a private firm to construct a bridge. When contructing the bridge, the architect makes sure that the bridge can support 80% of the population at any given time.  If that is the case, does every citizen have a claim to the property they bought at any given time? Of course not. It is fradulent because even though every citizen paid for the bridge, the property which they paid for cannot be used by everyone who paid for it at a certain time.

Meet “Fractional-Reserve Banking”. Now just imagine if the bridge was only built to support 10% of the population at any certain time (Reserve Requirements=10%).

Semantics or Newspeak?

Posted in Political Rant with tags , , , , , on January 11, 2009 by lilburtonboy7489

I was stunned to read this article from the Washington Post. It amazes me how changing one word in a paragraph can twist the article into something completely different. For example, in this article, the word ‘spending’ was changed to ‘investment’.

“The Obama plan represents not new public works but, rather, investments that will work for the American public. Investments to build the classrooms, laboratories and libraries our children need to meet 21st-century educational challenges. Investments to help reduce U.S. dependence on foreign oil by spurring renewable energy initiatives (many of which are on hold because of the credit crunch). Investments to put millions of Americans back to work rebuilding our roads, bridges and public transit systems. Investments to modernize our health-care system, which is necessary to improve care in the short term and key to driving down costs across the board.”

So apparently spending of any sort, no matter how unprofitable or wasteful, is now considered an investment. So taking this advice seriously, I decided to invest in the new 32GB iPod touch for $350, rather than paying my insurance on my car. Best investment I ever made.

The Failure of Keynesian Economics

Posted in Political Rant with tags , , , , on December 29, 2008 by lilburtonboy7489

Even with total financial collapse being possible, our government is looking to a failed economic theory for help. It’s called Keynesian economics. This theory has been shown by both logic and history that it is not a successful economic system. Keynesian economics is the theory that the government can stimulate economic growth by intervening in the private sector.

Many times, a theory will look good on paper, but ultimately fail in the real world. Keynesian economics is not one of those theories. It fails both in theory and in the real world, and I will show a couple of reasons why.

Keynes says GDP=C+I+G+NX So he assumes that if you increase increase any variable in the equation, the GDP will increase accordingly. This is what his entire theory is based on. However, he consistently forgets that simply moving the wealth around is not creating wealth, but rather just allocating it differently. I’ll show some examples of this fallacy.

Before I address these issue, I would like to point out each variable I will use and give it’s definition:

GDP- Gross Domestic Product

C- Consumption

I- Investment

G- Government Spending

NX- Net Exports (Exports-Imports)

T- Taxes

MPC- Marginal Propensity to Consume (How much is spent out of every dollar)

First, consider this: C= c+{MPC*(Y-T)}. So in order to increase G, you have to increase taxes. Increasing taxes adds value to the variable T. Increasing T means that C will decrease. That is unavoidable.

So the increase in G is offset by the decrease in C due to higher taxes.The GDP doesn’t expand, it is just proportioned differently. A decrease in T (Taxes) has more of an effect on the economy than increasing G (Government spending) Why? Because consumers will only consume what they demand. We decide what has value. If we decide that iPods are more important to us than a parking ramp, iPods have more value. That’s because only the consumers can choose what has value by demanding it.

So when G is increased, production may increase, but not necessarily production of something we demand. For example, if government spending is increased to pay for a parking ramp in the middle of a cornfield, is that good? No, because something was produced which has no value because it’s not in demand. So government spending takes from consumers (the only people that can give value to something), and spends it on things which may not have value.

Consider this: According to this logic, shouldn’t the government hire people to run around and destroy things? If that was done, the government could spend the money to repair these things. It’s an increase in G and also gives jobs to people. So shouldn’t Keynes want that?

Of course, the problem is that nothing was created with value. So it did not expand our wealth.

All kinds of porblems arise when employment becomes an objective rather than a result. Keynesian economics is in large part a theory dedicated to fight unemployment. Since this is the case, all Kenesians are opposed to all technological advancements that make us more productive and successful, right? Of course, not, that was be ridiculous. But it would be entirely consistent for Keynesians to hold that position.

Another thing to understand, is that an increase in C (Consumption) is not intrinsically good. This is especially true when NX (Net Exports) decreases when C is increased.

For example, if our nation imports 90% of its goods and services, our NX will be negative, subtracting from our GDP. So what happens if our C increases by 50%? The -NX will increase enormously. So when we have a deficit in NX, when our C increases, the increase in C is offset by the decrease in NX.

Keynes even came up with a concept knows as the “Multiplier”. The concept states that government spending is a more powerful tool of economic growth than letting the market consume. The equation for the multiplier is: 1/(1-MPC). Say that every consumer spends $0.75 out of every $1.00 they make. That makes the MPC=.75. So now apply it to the equation: 1/(1-.75)=4. This is called the “Multiplier effect”. Keynes says that if the government spends $1,000,000 to “stimulate” the economy, you multiply it by this multiplier. So in this case, as I showed above, the multiplier is 4. So you multiply the government spending by whatever your multipler is. So in this case, it would be 4 x $1,000,000=$4,000,000. And POOF! That money taken from taxpayers just quadrupled.

Of course, if you actually think this through, it’s a ridiculous concept. As I mentioned before, the only way value can be added to a product, is through consumer demand, which only the consumers can decide. So when the government consumes, it is taking our money, and spending it on things not in demand. Since worthless things are produced, there is no growth. The only change, is that the consumer who add value to products, have less spending power because the government has taken it and spent it elsewhere.

The entire concept of a multiplier is a joke, yet it is still the most widely accepted economic theory today.

So that’s my shallow critique of the problems associated with Keynesian economics and basically any type of government intervention in the economy. Our economic problems will continue of we don’t break away from this mindset that the government can fix the economy by interfering and printing money.

The Real Financial Crisis

Posted in Political Rant with tags , , , , , on December 14, 2008 by lilburtonboy7489

According to the many of the world’s leading economists, the free market has resulted in a catastrophy. There is not enough credit to go around, and the main culprits are the people who will not consume. So now comes the time to find solutions. What are we to do in this mess when no one seems to have the answer? Well the financial crisis is not what it seems, and I will show you why.

First, I will address the fallacy that the free market is part of the reason for failure. The first industry to fail was the banking industry. The banking industry is the most heavily regulated in the U.S. The Federal Reserve manipulates the interest rates, controls their reserves, regulates who get the loans, buy and sell them bonds, and insure them with funds they do not have. This is not a free industry.

The FED bought bonds from commercial banks, increasing their reserves. When they do this, the interest rates decrease. When the interest rates are extremely low, people borrow more than they normally would. This results in unwise investments which were made because of the low interest rates. If this were to happen at 1 or 2 banks, it wouldn’t be a problem. However, this interest rates effect every bank in the country. This is the cause of fake booms and very real busts. If it was not centralized, booms and busts would not be possible.

Now to the credit shortage. Excessive borrowing is how we get into this mess in the first place. People borrow much more than they have, so the marginal propensity to spend is above 1. An economy cannot sustain itself when the participants are spending 1.2 of every 1 dollar they earn.

Besides, if there is not enough money to go around, the easiest solution of course would be to legalize counterfeiting.

Next is the lack of consumption. The equation for GDP is GDP=C+I+G+NX. The problem is that C (consumption) is too low, so our GDP is going to shift to the left, showing a decrease is total GDP. Of course that sounds awful, but is it really?

Before I show the cons of consumption, I will show the difference between hoarding money and saving money. When people spend less, the assumption is that they are keeping their moey hidden under their bed. However, the truth is that hoarding does not happen. Instead, people put their money in the bank or in the stock market. When the money is put in the bank for saving, it becomes available for the banks to loan out. The alternative of that, is to invest it in mutual funds, bonds, or the stock market. This causes an increase in I (investment). This increase in I is more important than the decrease in C because I is investment in production, where C is spending alone. Also, most spending is on imports, which causes another decrease in NX (net exports), causing the GDP to shift to the left.

Our current GDP is way beyond the potential GDP. How can we be beyond the potential? Borrowing. As I mentioned before, people are borrowing much more than normal due to the low interest rates. So people borrow this money, and plug it into the equation GDP=C+I+G+NX in the form of C and I. So the GDP is boosted, but not because of increased production wealth, but borrowed funds. So the level of GDP we have had is fake. It is beyond the potential because of the borrowing. This is called an inflationary gap.

In time, the bad investments and massive defaulting on loans results in an economic crash, which we have just had. We fall back to the potential GDP, or slightly below. This is called a recessionary gap. It is healthy for the economy, as long as the market is allowed to make the corrections needed.

However, inaction is political suicide, so the market will not be able to correct itself. The government will attempt to boost GDP by increasing G (government spending). However, this will fail because C= consumption+[MPC(Y-T)]. T (taxes) is increased in order to increase G. By increasing G, it will decrease C which means the GDP will not increase at all.

This is the real financial crisis which you will not hear in the media. It will not get better anytime soon because the only solution is to free the market. When people are in a state of panic, which they are right now, people want the government to help. Too bad no one realizes that they will only make it worse.

Politics and Economics, Principles and Pragmatism

Posted in Political Rant, Uncategorized with tags , , , , , , , , on December 14, 2008 by lilburtonboy7489

Too many times have I heard people talk about politics and economics being two separate worlds. People believe you can be a social liberal, and fiscal conservative. That the role of the state somehow differs from the economic system. What these people do not understand, is that the economic system of a country defines the role of the state. Economics and politics cannot be isolated from one another.

If you believe in a true free market, your view of the state’s role has already been decided. The free market cannot tolerate taxation. Taxation opposes the entire idea of a free market. Without taxation, what can the government possibly do? It would have no funding. Without funding, the government could not fund its courts, police, military, roads, social security, medicare, a central bank, or even your local DMV. With a free market, the government would cease to exist. The free market is anarchy.

Pretend you break up political philosophy into two groups; Statists and Anarchists. If you favor any form of taxation or regulations, you have just become a statist. You have decided that you do not believe free will should be upheld. You are saying that people should be controlled by others. Using consistent logic, the argument permits government control. The current debate among politicians isn’t whether the government can rule others, but rather to what extent. By this logic, it is permissable to take from some, and give to others. It is permissible to violate property rights, because there is no such thing within a state.

You either believe in a free market or you don’t. You are either an anarchist or a statist. So why is there so much fighting between statists? Some statists even say that the government should not violate our property right. This shows a complete lack of consistency. These small government politicians have taken an inconsistent stance, void of all principles. This is called pragmatism. How can politicians argue from a principle stance of rights, when they have already shown they do not believe in rights?

Russ Feingold is a Senator from Wisconsin. He has been one of the most heroic opponents of the PATRIOT ACT. He opposes it because it is a blatant violation of our property rights. However, Feingold is also a pure socialist. He believes we should all be given free education, healthcare, and welfare spending in general should be massively increased. So what’s the issue here? The issue is the support for the state. Support for the state shows that the government can violate all rights it sees fit. So there is a principled stance by these statist politicans. Once the principle is established that the state is permissible, every decision after that become pragmatic. This makes it entirely inconsistent to make an argument for rights or principles in general.

One it has been established by a politician that the state is legitimate, that politician must not make any argument stemming from a belief in rights. As I mentioned earlier, rights cannot exist within a state.Instead, he must argue that the results of policies will accomplish their goals. Take the bailouts as an example. In order for a statist politician to remain consistent, he must simply make his case based on his predictions of how the bailout will impact our economy. In order to argue that it is wrong for the government to do so, he must argue against the existence of the state as well.

Of course, everything mentioned above is assuming logical consistency, which is non-existent in today’s political realm. This brings me to one of the most inconsistent groups I have ever studied; Libertarians.

I like to break libertarians into two groups; Principle Libertarians and Pragmatic Libertarians.

The Principle Libertarians argue for minimal government. They say we have property rights, and the only legitimate role for the government is to protect these rights. They argue for this with one thing in mind, and that is morality. They believe that we have rights that need to be protected. However, the problem, is that these libertarians believe that an entirely coercive government is the solution to protecting these rights. In order to do so, the government must first violate these rights through taxation and other means.

The belief in property rights should that the rights cannot be violated under any circumstances. Consistency constitutes rights. Believing that the government should protect our rights is an inherently statist claim. It says that the government can violate these rights. From this point, you just get back on the same tracks. It has been established that rights do not exist, but to what extent should the be violated? Once again, even a minimal government philosophy held by most libertarians is entirely inconsistent.

Of course, this problem can easily be avoided. All one would have to say is “Participating in government could be optional”. However, if it is optional, it is no longer government. Government is coercive, no matter what the size. If you believe that opting out should be allowed, then congratulations, you’re an anarchist.

On the other side, there are the pragmatic libertarians. They do not believe in principles, but rather the results. These minimal government folk may be immoral, but arguing from a pragmatic stancepoint is vastly more effective than arguing from a principle standpoint. These pragmatic libertarians are still statists, but of a lesser extent. They believe that the less government control over the economy, the more successful. They are very right, but their argument leaves no room for morality.

And lastly, the group not yet talked about. Those who believe in the free market.

These are the people who believe in a completely free market. As I mentioned before, this leads to anarchy. In a free market, the government cannot exist. However, due to the bad reputation and violent nature of so many anarchists, I refuse to be recognized as such.

I defend my viewpoint from both stances of results and principles.

As far as results, I am refering to the economic outcome of the free market. I won’t go into depth about the advantages of the free market in this article, but I’ll briefly explain some things.

The most basic driving force of the market is competition. This competition is involved in every single transfer in the market. Contrary to popular belief, the market is completely self-correcting, as long as there is no intervention. Competition is the reason. The free market has the solution to every possible issue. The only things that will be produced, are things which are in demand. If there is a surplus, the price will drop. If there is a shortage, the price will rise. There would be no chance for depressions which require systematic failure brought about by monetary policies. Employment would remain a result of production, not a goal itself. Smart businessmen would be rewarded for doing well, and poor businessmen would be punished for being bad businessen.

In every possible way, the free market is the best way to ensure that every transaction is mutually beneficial. In the future, I will write in much more detail.

Lastly, I will briefly talk about the free market from a stance of principles. When it comes to arguing from a stance of principles, it gets difficult. That’s because of two reasons: 1) People don’t care about principles 2) We all have different views of what principles should be upheld.

The free market has moral rights, not legal rights. There is no such thing as a legal right, because in order for legality to exist, right are violated. So I will just right this from a stance of free will. Whether two people have identical viewpoints on morality or not is irrelevant. Everyone would agree that we should allow free will. This way, people can exercise their free will and choose which principles to believe in. Without free will, we do not even have the choice to believe in different principles.

So this is where the non-aggression principle comes in. No one can use coercion against anyone or his possessions. This means no one can steal, kill, rape, or harm in any way. It basically means no coercion. My entire political and economic theory can be summed up by this one principle. No coercion means no state. No state means free market. This is why economics and politics are impossible to separate.

From a principle standpoint, no one can legally have their free will stopped by a coercive force. This assurance of free will is the only system (or lack of) which allows people to act morally. When free will is not present, neither is morality.

As for being pragmatic, the free market wins big. A free market will always be more successful than a controlled economy for an infinite number of reaons.

The Free Market wins in all areas. Now all we need is a new name. How about Free Marketeers? Lame? Yes. Better than being called an anarchist? Yes. Works for me.