Maurice Hinchey Is So 14th Century

About two years ago Congressman Maurice Hinchey proposed to affix price controls to gasoline.  This recent example of economic illiteracy is hardly surprising. Polls have consistently found that social democrats have virtually no understanding of economics, which is probably why they are social democrats in the first place.  Sadly, this level of ignorance is shared by both parties, both of which supported the "bailout".

The popular image of the Middle Ages is that there was little knowledge about markets and that all of society lived happily on a feudal estate where there was no money and no economy in the modern sense. This claim has been turned into Tönnies's sociological constructs of "gemeinschaft" and "geselleschaft".  The gemeinschaft economy supposedly characteristic of the Middle Ages was one governed by organic unity, common beliefs and the like, whereas the geselleschaft economy is more or less the market economy.

It turns out that the vision of the Medieval economy on which Tönnies's constructs were based is wrong.  Also, it appears that by the 14th century European monarchs already had better economic understanding than today's Democrats.  In other words, there was a practical but likely not a theoretical understanding of how markets work.  Fourteenth century monks knew more about economics than my economically illiterate congressman, Maurice Hinchey.

Allow me to quote a passage concerning English history from Joel Kaye's essay "Monetary and Market Consciousness in Thirteenth and Fourteenth Century Europe" which appears on pages 379-80 of Lowry and Gordon's "Ancient and Medieval Economic Ideas and Concepts of Social Justice":

 "The clearest witness to this perception among English chroniclers is the author of the Via Edwardi Secundi. Though this chronicle was intended to record the reign of Edward II and his struggles, thoughts about money and prices continually crop up, as if they, in themselves, had historical significance to the writer and his audience.


"In 1315 after the military disaster at Bannockburn and in reaction to a terrible harvest and steeply rising prices, the chronicler records that Parliament, 'looking to the welfare of the state, appointed a remedy for this malady'. Prices on common foodstuffs such as oxen, pigs, sheep and chickens were fixed by law. The next year, 1316, Parliament was forced to reverse itself and cancel the maximum price edicts it had imposed even though the country was still in the grip of a disastrous harvest and rising prices.  Here is how the chronicler explains it:

"'The regulations formerly made about food were completely abolished...For as a result of that statute little or nothing was exposed for sale in the markets, whereas formerly there had been an abundant market in goods, though they seemed dear to travelers.  But it is better to buy dear than to find in the case of need that there is nothing to be had.  For although scarcity of corn raises the price, subsequent plenty will improve the situation.'

"Not only does the author choose to include this particular act of Parliament in his chronicle (when up to this point he mentioned Parliament only briefly and then only when it concerned King Edward), but he sees fit to add his own thoughts on the subject.  He notes that goods disappear as the result of price fixing and that high price is preferable to scarcity....

"There is no doubt that  a systematic conception of the market as a dynamic, self-regulating system constructed around the instrument of money had long been held among traders and those whose livelihood centered on trade. A glance at the journals of fourteenth-century merchants reveals how sophisticated their understanding of the market had become, and how central this understanding was to every aspect of their activity."

In fact, fourteenth century merchants had greater economic sophistication than social democratic congressmen of 21st century America.

Redlich or Republicans for Cuomo (if Paladino Loses)?

If Carl Paladino loses the GOP primary I see three options:

1. Stand down and don't vote for Governor at all
2. Support Warren Redlich, Libertarian Party candidate for governor
3. Join the ranks of Republicans for Cuomo.

Although I do not like Cuomo, in fact I view him as equaling Lazio, I think it is important for the GOP to stop supporting candidates who talk out of both sides of their mouths.  Lazio was a paid lobbyist for JP Morgan. But any candidate I support would be thinking about ways of reducing special interests' excessive capture of government. I am puzzled how Lazio could possibly resist providing largess to special interests when he has lobbied for it professionally.  As well, the bailout of the banking industry in 2008 was the worst government policy of the past 25 years, yet Lazio was deeply involved in it.  Hence, it is difficult to see how he would support policies that are antagonistic to big government given that such expansion has largely been to his own benefit.

Lazio's written policy positions are meaningless because the Republicans have repeatedly claimed to be for smaller government and then expanded government.  The policy positions of someone like Lazio have the same weight as the e-mails from Nigeria offering to deposit $10 million in your bank account if you give them the id number.    Even big government waster George W. Bush did not say that he was for big government.  Rather, he claimed to be for "compassionate conservatism" before passing a massive subsidy to the pharmaceutical industry and advocating increasing restrictions on civil liberties.

The Libertarian candidate, Warren Redlich, posts a piece about Republicans for Cuomo on his blog. Philosophically I agree with Redlich, and do not see a vote for a minor party as throwing one's vote away if there is no viable alternative.  But a message needs to be sent to the pathetic New York GOP this year that (a) the bailout was unacceptable; (b) the pattern of Republicans claiming to be for smaller government when they are not is unacceptable; and (c) the in-grown old boy network of Alfonse D'Amato and George Pataki has to be brought down.

Of course, there is still a chance that Paladino, who is outside of New York's pathetic GOP establishment, can still win.  Otherwise, it will be a tough choice between Redlich and Cuomo.

A People Gets the Government It Deserves

"A people gets the government it deserves."  The former president of the United Auto Workers Union, Doug Fraser, said that to me while riding in a taxi cab downtown from Columbia University.  The year was circa 1990.  I was a doctoral student and Fraser was a visiting scholar at the Business School.

Although I disagreed with Fraser politically he made an excellent point.  Earlier that week I showed him an article about him in the newspaper of the Socialist Workers' Party, the Militant, that was being sold right outside the Columbia main gate.  I bought a copy as a goof and there was an article about the guy whose lecture I was about to hear.  The Militant didn't like Fraser, nor did Michael Moore, whose film 1988 Roger and Me criticizes the UAW leadership as being too friendly to management.  Fraser had stepped down in 1983 (he passed away in 2008).

What kind of government does America deserve?  Most of the Republicans I know are unhappy with the way things are going, but are eager to vote for establishment candidates who aim to continue the course.  Most of the Americans I know suspect that things have not gone well but do not trouble themselves to question the economic policies of the politicians for whom they vote, returning the same politicians to office who created the policies that caused thing to go the way they are going.

In my town, Olive, NY, a large percentage of Republicans, more than half, refused to sign nominating petitions. Many complained that they did not know anything about the candidates.  When I suggested that they attend Town Committee meetings they refused. 

Most Americans accept the opinions espoused on television and in their local newspapers, not questioning whether the government that has resulted from those opinions is functioning fairly, competently or liberally. Or, they complain about the way things are but do not trouble themselves to learn about why things are going that way. 

When confronted with alternatives, such individuals prefer the tried and true path, true to the trend of a reduction in their standard of living and their freedom.  The worst among them are the party activists who assume that the same slop that the GOP has served for the past two decades is just delicious and they definitely intend to serve it again even though it is warmed over for the twentieth time.

A people get the government they deserve.  To quote Alfred E. Neumann as my response to Doug Fraser, "What--me worry?"

Republican Paradox

Several of my friends support Rick Lazio for Governor of New York State.  Lazio had worked as a lobbyist for JP Morgan and had helped arrange Morgan's $25 billion bailout. No greater expansion of government power has occurred in the past two decades.  In exchange for his help in facilitating the expansion of government, JP Morgan paid Lazio a one million dollar bonus.  In addition, Lazio is on record in support of abortion.  As well, Lazio is entrenched in the same self destructive New York GOP that has allowed Alfonse D'Amato to play the GOP against itself in favor of the Democrats.  It is the same GOP  that continues to support Governor George Pataki, whose last term in office involved expansion of state government, an alliance with the state's Service Employees International Union boss Dennis Rivera and corrupt indifference to extensive Medicaid fraud.  These patterns cannot be excused by the State Assembly's Democratic majority or the state's liberal ideology, as even the left-wing New York Times took issue with the criminality in Medicaid that flourished during the Pataki administration.

It is thus puzzling that so many Republicans continue to favor Rick Lazio for governor, the GOP establishment's choice. These Republicans seek an outsider with considerable establishment experience.  That is, someone who supports less government but has spent his life earning a living through big government.   I would support Paladino if only to keep Lazio out of office, and a candidate who makes a 20% budget cut the centerpiece of his platform is certainly preferable to a paid lobbyist for JP Morgan. Another Pataki-like fraud would simply be too discrediting to the GOP.

The Republicans have grown used to dissonance between words and deeds.  The dissonance has become so sharp that the party's image has deteriorated and will not recover until new personnel are introduced at the highest levels.  Mr. Pataki and Mr. D'Amato are relics and do not belong in any leadership role.  Likewise, candidates such as Michael Bloomberg and Rick Lazio with big government track records need to be purged.  There is nothing moderate about the the bailout that Mr. Lazio facilitated. It is not mainstream; it is not "conservative".  The bailout was an extreme, self-indulgent, radical expansion of government, a violent taking of money by the powerful from those less powerful, and those participating in it lack the moral fiber to play any prominent role in government.