Austrian Economics Research Conference, Citation by Wall Street Journal Editorial Page

I spent Thursday through Sunday at the Austrian Economics Research Conference, which is sponsored by the Mises Institute. The Mises Institute is next door to Auburn University.  The conference is small but lively, and the speakers were excellent. I was delighted to meet Bob Luddy, the founder of CaptiveAire Corporation; Hans Herman Hoppe, who received an achievement award;  Sam Johnson, who is a retired Exxon executive who adjuncts at Auburn University; and the founder of the Mises Institute, Llewellyn H. Rockwell, Jr.

I gave a presentation on the historical evolution of political groupthink and intolerance in higher education. It went well, and I am looking forward to further exploring the data that I presented. 

While I was at the conference, someone from Boston emailed me to ask for links to the work I've done on faculty political affiliation because the Wall Street Journal (paid access) editorial page had cited my research on Friday.  I was thrilled to get the cite, but I disagree with the editorial.

According to the Journal,  President Trump's executive order has the right impulse, but the executive order is unclear.  It merely mandates that a list of federal agencies review incursions on free speech on campus.

The Journal argues that absent the executive order markets will correct for incursions on free speech, but the institutional history suggests otherwise.  Colleges have received enormous institutional support from government and from tax-exempt foundations, and much of this support has had ideological strings attached. Such support extends to tax-exempt endowments that shelter the leading colleges from market concerns.  As well, monopolistic media that collude with and ideologically support Antifa extremists on campus support the reputations of colleges that abuse free speech. The major media outlets take their cues from and collaborate with campus Antifa terrorists.

As it is written, the executive order merely encourages agencies that oversee funding to colleges to consider whether the colleges are violating federal laws, including the First Amendment.  One of the laws is Section 501(c)(3), which prohibits tax exemption for political or ideological advocacy.  Although when in power the Democrats may abuse these provisions, they have already abused their privileges to an unlimited extent, so that the current intolerance on college campuses can hardly be increased.  Hence, there are limited downside risks from the Democrats, who have shot their wad.  When Republican administrations are in power, they now have some impetus to enforce the law and at times to revoke tax exemptions of endowments.  Although the threat to colleges may be intermittent because it is limited to Republican administrations, colleges need to think long-term because it is difficult to change programs and policies.  Hence, an intermittent threat is almost as good as a permanent one.

An additional step that the Trump administration might take is to make explicit that all federal aid is contingent on compliance with the First Amendment and that when colleges violate First Amendment Rights affected individuals have a cause of action that includes punitive damages.

The Democrats' War on Rural America

 A piece by Paul Overberg in today's  Wall Street Journal shows 20 charts that indicate how badly rural Americans have fared. The election of Donald Trump, mostly by rural voters, can be interpreted to be a reaction, and the campaign to eliminate the Electoral College a counterreaction.

Inflation-adjusted household income has declined since 2000, and it has declined the most in rural areas. Much of the  decline occurred during the Obama years. That contrasts with the stock market, which has received massive public subsidization.

Those who foot the bill for "too-big-to-fail" banks are the same people who are dying at increasing rates.

Where I live, Olive, NY, New York City has long played an imperialistic role similar to that of any Roman-style power. It has done so to procure virtually free water; it chose to go the imperial route rather than purchase water ethically back in the 19th century.

In his book Empire of Water, David Soll outlines the 100-year history of theft, exploitation, and regulatory caprice that deprived the ancestors of many people I see each day of their homes and businesses, forcing many who had owned family businesses into becoming day laborers.

Environmentalists, dominant in the Democratic Party,  have learned from New York City and since the 1990s have systematically attacked rural areas. This occurred most aggressively during the Obama years.

Not satisfied with increasing death rates in rural areas,  Robert Reich, the American media, and their fellow Democrats campaign for more political power to be concentrated in urban centers by abolishing the Electoral College.

Trump versus Sanders

The Wall Street Journal blog reports that Bernie Sanders aims to win Donald Trump's supporters' votes, for they are anxious about the economy, whose decline Sanders blames on greed.  Greed, of course, has always existed, and there is no evidence that there is more greed now than there was in the free market period of American history, when real wages grew at 0.5% to 2.5% per year.

Mr. Sanders is right: There is little difference between Mr. Trump and him. Both are big government advocates. Mr. Sanders sees government redistribution as the cure to greed, an absurd, impossible plan, and Mr. Trump sees government immigration restrictions as the cure to job loss, an equally absurd non-sequitur.

While Hitler, like Trump, was a racist, he was also, like Sanders, a national socialist. The twenty-five-point Nazi plan of 1920 contains much overlap with Mr. Sanders's views, albeit Sanders's Brooklyn Jewish background may not have been to Hitler's taste.

Point six of the Nazi twenty-five-point plan, for instance, was nearly identical to Sanders's position on immigration: "Non-citizens may live in Germany, but there will be special laws for foreigners living in Germany."

The Nazis also agreed with Mr. Sanders's redistributionist schemes, as in points ten and eleven: "Every citizen should have a job. Their work should not be selfish, but help everyone. Therefore we say...No one should live off money from rents or other income unless they have worked for that money."

Like Sanders, the Nazis hoped to repeal greed.  Since greed is a natural impulse like sexual desire or hunger, aiming to repeal greed opens the door to repression and ultimately murder, as has been the case with a long list of large-scale socialist states over the past century.

The Nazis' immigration policies, redistributionist schemes, and opposition to selfishness parallel  Bernie Sanders's platform. The American left is a reincarnation of the Nazi movement, with the racist (but not anti-Semitic) element excised.

Salafi Islamacists Cut Off Christian's Ear

The Wall Street Journal reports a gruesome tale of the Arab Spring.  It mentions that Egypt's Christians, the Copts, have come under increasing violence as Egypt has become freer.  In other words, freedom involves murdering and maiming minority groups, according to the Obama administration.  The Journal reports that Salafi Muslims burnt a Christian's apartment and then amputated his ear.

I wonder if The Journal will now be banned from college campuses.

Just Say No to the Pro-Bailout Media

Gregory Wyche of Perfect Pitch Media Relations wrote a piece on Kitco concerning a Wall Street Journal event he attended surrounding the author of the book Freakonomics.  Wyche was surprised that the author, when questioned by a member of the audience, averred that gold investing is right in the sense that a broken clock is right twice per day.  My suggestion to Mr. Wyche was that he might consider improving the quality of his associates:

Wyche:

On October 19th I was invited by The Wall Street Journal to attend a book party here in Manhattan for the launch of the illustrated edition of “Super Freakonomics” I had just seen and liked the movie “Freakonomics” on opening day two weeks before. When it came time sit down for the presentation I was thrilled to be four rows back from one of the stars of the movie and co-author of the book Stephen Dubner. This guy has become successful by challenging conventional wisdom in way way out methods. To say he has hit the ball out of the park in his ability to look outside of the box is a total understatement...(read the whole thing here).

My response:

Thanks for your Kitco article, which I enjoyed. I had read Freakonomics when it came out and thought it was good. Four points:

1. Economics is not a science and the way that economic theory is practiced is not bounded by testable reality. Hence, in economics thinking outside the box is not a meaningful achievement. For example, deconstructionism is an academic theory that the meanings of texts can be derived by reanalyzing words in ways that reveal power relationships. The conclusions deconstructionism draws cannot be tested against reality. It is like astrology. The same with economics as is practiced in universities. Saying that an economist "thinks outside the box" is like saying that a deconstructionist in an English department or an astrologer thinks outside the box. "Geminis really aren't mercurial." "Wow, he thought outside the box." The problem is that there is no testable or "falsifiable" body of knowledge to contradict claims. Keynesians claim the bailout and the stimulus worked. Monetarists claimed the bailout worked but not the stimulus. Sane people wonder what they are talking about, turn off the TV and do not purchase the Wall Street Journal.

2. It is not necessary to think outside the box with respect to economic history and macro-economic issues. Keyensian economics failed in the 1930s; it failed in the 1970s; and it failed in the '00s. It fails every thirty or forty years. Arguing for Keynsian economics means thinking outside the box in that reality has never confirmed it, hence the Keynesian argument is unbounded by reality. Nor does the anti-Keynesian argument require thinking outside the box. It is a very old argument, nearly but not quite as old as the mercantilism of which Keynesian economics is a restatement.

3. I'm puzzled as to why you would think that anyone associated with the pro-bailout media such as the Wall Street Journal would have anything to say in opposition to the pro-Wall Street monetary expansion. The argument for gold is an argument against both monetarism and Keynesianism; against supply siders and deficit spenders.

4. Since economics as practiced by academics is superstition, akin to astrology or palm reading, it is puzzling to me why you would hope that a speaker that the Wall Street Journal sponsors (or anyone associated with the Wall Street Journal) would have anything useful to say.

Not meaning to be prickly, but maybe the lesson you are suggesting is that it might pay to use some common sense and use the dollar you would have spent on the Wall Street Journal to do something more useful, like saving up for a martini at your local bar.

Best wishes,

Mitchell Langbert

Tea Party Movement Outpolls Democrat and Republican Parties

Larwyn just forwarded a link to Ace of Spades HQ blog which in turn links to AllahPundit:

>"The entire Republican Party...continues to maintain a net-negative favorable/unfavorable rating, 28 percent to 43 percent...But, for the first time in more than two years, the Democratic Party also now holds a net-negative rating, 35 percent to 45 percent...By comparison, the conservative libertarian-leaning Tea Party movement has a net-positive 41 percent to 23 percent score in the poll."

I had previously blogged about a Wall Street Journal article about this poll. Ace of Spades and Allahpundit out that Americans' views on the tea party movement correlate strongly with whether they watch the more left leaning of the Democratic media, CNN and MSNBC, or the mainstream media, Fox, which is the largest cable channel (almost equaling the entire combined viewership of the other cable channels, and apparently larger than any of the Democratic network channels, NBC, ABC and CBS.)

Gerald P. O'Driscoll, Jr. Advocates Gold Standard

Gerald P. O'Driscoll, Jr., previously of the Federal Reserve Bank of St. Louis and now of the Cato Institute, has an excellent article in today's Wall Street Journal. O'Driscoll writes:

"Mr. Obama needs to stop the next asset bubble from being inflated by imposing a commodity standard on the Fed. A commodity standard (such as a gold standard) imposes discipline on a central bank because it forces it to acquire commodity reserves in order to increase the money supply. Today the government can inflate asset bubbles without paying a cost for it because the currency isn't linked to the price of a commodity."

The Federal Reserve Bank has become a barbaric relic. It is time for Americans to think about adopting a civilized alternative to the Fed's barbarism: a gold standard.