Saturday, January 23, 2010
Reason Blogs My Interview with Gov. Gary Johnson
Reason Magazine's Jesse Walker just e-mailed that Reason has blogged my interview with Gov. Gary Johnson that appeared on the RLC site. Reason's blog is entitled "Johnson makes some sweet, sweet sounds."
Bernanke and the Deep Blue Sea
The Hill.com says that a number of senators like Inhofe (R-Okla.), Sessions (R-Ala.), Feingold (D-Wis.), Sanders (I-Vt.), Dorgan (D-N.D.) and Boxer (D-Calif) oppose Ben Bernanke's renomination to head the Fed, while Harry Reid supports his reappointment. Bernanke did what Milton Friedman said the Fed should do in the face of a banking collpase: re-inflate by creating reserves. Right before he died, Friedman wrote an article in the Wall Street Journal applauding the post 2001 re-inflation for eliminating a recession. Seven years later the banking system collapsed because of that re-inflation, and Bernanke followed the same prescription, arguing that the real problem was lack of regulation. There have been banking collapses 50 thousand times and in 50 thousand different circumstances in world history, and to claim that regulating derivatives will in the future eliminate them is a lame joke.
The choice between Bernanke and an appointment by the left-wing extremists in the Senate is a choice between the devil and the deep blue sea. I prefer Bernanke to whatever oceanic corruption the Democrats have on offer. But we need to be thinking of alternatives to the Fed, the source of the current economic problems.
The Federal Reserve Bank was established in 1913 in circumstances that are properly called veiled. Its purpose was expanded in 1932, when the gold standard was abolished, again without public discussion. Since 1913 there has been less innovation, slower growth and, since the ultimate elimination of the gold standard in 1971, a stagnant real hourly wage. The past 42 years of almost no growth in the real hourly wage, the best indicator of the welfare of American workers, contrasts with significant growth between 1800 and 1970. The economy was globalized in the 19th century, labor unions came and went (union density is at the same level now as it was early in the 20th century) but innovation proceeded apace and workers flocked here from all over the world, enjoying generations of upward mobility.
The upward mobility ended in 1970, following the final elimination of restrictions on the Fed's power to print money, the Vietnam War and the explosion of regulation in the 1960s and 1970s, LBJ's "great society". Since 1970, Wall Street's activities have considerably expanded, driving almost all other major corporations out of New York City. Hedge funds have flourished. Income inequality has grown. The S&P 500 has grown from 85.02 in 1970 to 1092 today, nearly 13-fold, while consumer prices have grown 5.5 fold. The difference is a wealth transfer from consumers to stock holders that the Fed and the banking system have facilitated. At the same time, the federal and state governments combined have tripled relative to national income. The Fed has facilitated expansion of non-value-producing sectors, banking, Wall Street, real estate speculation and government, at the expense of the value-producing private sector.
The extreme left politicians who would replace Bernanke would accelerate the Fed's destructive subsidies to the wealthy. Bernie Sanders and Barbara Boxer would like to increase the Fed's rate of monetary expansion, subsidizing destructive government programs along with the bankers they claim to detest. The average American would see their pensions, savings and wages decimated while wealthy politicians, real estate investors, corrupt political cronies and "limousine liberals" wallow in the hot loot, the savings of widows and workers' blood.
Recently, former New Mexico Governor Gary Johnson told me that he favors competition between monetary regimes. This would be a major improvement as those who prefer to save and receive pensions in modes other than the dollar could do so. As well, insurance companies could begin to provide the option of retirement annuities in gold if they began to lend at interest with repayment in gold.
The choice between Bernanke and an appointment by the left-wing extremists in the Senate is a choice between the devil and the deep blue sea. I prefer Bernanke to whatever oceanic corruption the Democrats have on offer. But we need to be thinking of alternatives to the Fed, the source of the current economic problems.
The Federal Reserve Bank was established in 1913 in circumstances that are properly called veiled. Its purpose was expanded in 1932, when the gold standard was abolished, again without public discussion. Since 1913 there has been less innovation, slower growth and, since the ultimate elimination of the gold standard in 1971, a stagnant real hourly wage. The past 42 years of almost no growth in the real hourly wage, the best indicator of the welfare of American workers, contrasts with significant growth between 1800 and 1970. The economy was globalized in the 19th century, labor unions came and went (union density is at the same level now as it was early in the 20th century) but innovation proceeded apace and workers flocked here from all over the world, enjoying generations of upward mobility.
The upward mobility ended in 1970, following the final elimination of restrictions on the Fed's power to print money, the Vietnam War and the explosion of regulation in the 1960s and 1970s, LBJ's "great society". Since 1970, Wall Street's activities have considerably expanded, driving almost all other major corporations out of New York City. Hedge funds have flourished. Income inequality has grown. The S&P 500 has grown from 85.02 in 1970 to 1092 today, nearly 13-fold, while consumer prices have grown 5.5 fold. The difference is a wealth transfer from consumers to stock holders that the Fed and the banking system have facilitated. At the same time, the federal and state governments combined have tripled relative to national income. The Fed has facilitated expansion of non-value-producing sectors, banking, Wall Street, real estate speculation and government, at the expense of the value-producing private sector.
The extreme left politicians who would replace Bernanke would accelerate the Fed's destructive subsidies to the wealthy. Bernie Sanders and Barbara Boxer would like to increase the Fed's rate of monetary expansion, subsidizing destructive government programs along with the bankers they claim to detest. The average American would see their pensions, savings and wages decimated while wealthy politicians, real estate investors, corrupt political cronies and "limousine liberals" wallow in the hot loot, the savings of widows and workers' blood.
Recently, former New Mexico Governor Gary Johnson told me that he favors competition between monetary regimes. This would be a major improvement as those who prefer to save and receive pensions in modes other than the dollar could do so. As well, insurance companies could begin to provide the option of retirement annuities in gold if they began to lend at interest with repayment in gold.
Friday, January 22, 2010
Fox, Gingrich Offer Few Solutions to Government Bloat
Newt Gingrich, the creator of the congressional earmark frenzy that led to the bridge to nowhere and the Republicans' fall from power is on Hannity right now saying that he might run for president. Following Gingrich's performance in the New York 23rd district, I'm surprised he still has the audacity to claim that he favors reduced government. I'm still far from convinced that the Brown victory represents any kind of reaction to Republicrat government. Far from convinced.
Thursday, January 21, 2010
DNC Pickpockets Whine, Plot
I just received this e-mail from the DNC's chairman, Governor Tim Kaine. Kaine claims the Democrats need time to "dissect" the Brown/Coakley race. That's because the Democrats are extremists who are divorced from reality. To anyone who is in touch, the lessons for the Democratic Party extremists are quite clear.
>It goes without saying that we are disappointed by the result of the special election in Massachusetts.
>There will be plenty of time to dissect this race and to apply the lessons learned from it in elections to come. But in the meantime, we will continue to work tirelessly on behalf of the American people, and we will redouble our efforts to lay out a clear choice for voters this November.
>It goes without saying that we are disappointed by the result of the special election in Massachusetts.
>There will be plenty of time to dissect this race and to apply the lessons learned from it in elections to come. But in the meantime, we will continue to work tirelessly on behalf of the American people, and we will redouble our efforts to lay out a clear choice for voters this November.
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