The Mises Institute is coming to Phoenix with a timely and vital presentation on our economic future!
You're sure to profit from the Austrian perspective on the consequences of exploding U.S. government debt, just as Austrian analysis helped forewarn so many about the mortgage meltdown.
I'll join a distinguished panel of Mises Institute scholars on Saturday, April 10 for a presentation entitled "The Inflationary Path to Despotism."
From Ancient Rome through modern-day America, money inflation has been the means by which the state extracts wealth without recourse to taxation.
Such a monetary policy leads to gutting savings, punishing investment, and the launching of economic cycles and even soaring prices and banking disasters. But perhaps the greatest cost is in human liberty itself. The intellectual tragedy here is that few make the connection between the quality of money and the rise of despotism.
The prospect of hyperinflation in our future is the great horror that awaits us on the current path. It will not only mean death to the dollar but the rise of a ghastly statism.
This Mises Circle is devoted to exploring the relationship and providing a path toward permanent freedom. Admission is $85 per person and this includes lunch. Through the generosity of James M. Rodney, each attendee will receive a complimentary copy of Henry Hazlitt's The Inflation Crisis and How to Resolve It.
Speakers will include:
Douglas French, president of the Ludwig von Mises Institute and the author of Early Speculative Bubbles & Increases in the Money Supply. He received his masters in economics from UNLV; Dr. Murray Rothbard was on his thesis committee.
Thomas DiLorenzo, economics professor at Loyola University Maryland; He is a senior faculty member of the Ludwig von Mises Institute; DiLorenzo has authored at least ten books, including The Real Lincoln: A New Look at Abraham Lincoln, His Agenda, and an Unnecessary War, Hamilton's Curse: How Jefferson's Arch Enemy Betrayed the American Revolution--and What It Means for Americans Today, How Capitalism Saved America: The Untold History of Our Country, From the Pilgrims to the Present.
Jeffrey Tucker, the editorial vice president of the Mises Institute and the current webmaster for the institute's website, Mises.org. Tucker is also an adjunct scholar with the Mackinac Center for Public Policy and an Acton University faculty member.
Robert Murphy, an adjunct scholar of the Mises Institute and a faculty member of the Mises University, runs the blog Free Advice and is the author of The Politically Incorrect Guide to Capitalism, the Study Guide to Man, Economy, and State with Power and Market, the Human Action Study Guide, and The Politically Incorrect Guide to the Great Depression and the New Deal.
And I will be speaking about the command economy, a subject to which I devoted attention in my book, the New York Times bestseller, The Dollar Meltdown. A top-down, state-directed command economy is advancing on every front, visibly in areas like health care that get a great deal of media attention, and below the radar in things like capital controls.
Please join us Saturday, April 1o at the Phoenix Sky Harbor Hilton Hotel, and bring along those who you feel need exposure to Austrian school economics, the Mises Institute, and some insightful discussion of our critical economic times.
For more information, to register, and to find out about special scholarship registration for students, go to the http://mises.org/events/127.
The Bank of England deliberately stoked the consumer boom that has led to record house prices and personal debt in order to avert a recession, the former Bank Governor Eddie George admitted yesterday.
Lord George said he and his colleagues on the Monetary Policy Committee "did not have much of a choice" as they battled to prevent the UK being dragged into a worldwide economic slump by slashing interest rates. And he said his legacy to the current MPC was to "sort out" the problems he had caused.
Lord George, who headed the Bank for a decade from 1993, revealed to MPs on the Treasury Select Committee that he knew the approach was not sustainable. "In the environment of global economic weakness at the beginning of this decade... external demand was declining and related to that, business investment was declining," he said. "We only had two alternative ways of sustaining demand and keeping the economy moving forward - one was public spending and the other was consumption.
"We knew that we were having to stimulate consumer spending. We knew we had pushed it up to levels which couldn't possibly be sustained into the medium and long term. But for the time being, if we had not done that, the UK economy would have gone into recession just as the United States did."
He said he was "very conscious" that stimulating consumer demand could give rise to problems in the future. "My legacy to the MPC, if you like, has been 'sort that out'," he said. Under Lord George's governorship, rates were slashed from 6 per cent in 2001 to 3.5 per cent in 2003, pushing house price inflation above 25 per cent and high street spending growth to its highest since the late-Eighties boom.
In a wide-ranging discussion on the first 10 years of the MPC, Lord George also rejected suggestions that the MPC should target specific concerns such as soaring house prices, arguing that it was vital to take the broader picture of the economy.
Meanwhile, Kate Barker, a current MPC member, said in a speech last night that interest rate changes might become more frequent as the committee tackles volatile energy prices, rising inflation expectations and increasing pricing power. "This is a different kind of uncertainty from worries about demand which have been more usual during my time on the MPC, and I suggest that this may prompt a change in observed behaviour towards more frequent interest rate changes," she told the CBI North East dinner. The Independent
NEVER GIVE A PARASITIC BLOODSUCKER AN EVEN BREAK: KEYNES MUST DIE SO THE ECONOMY MAY LIVE!
SELLING KEYNES SHORT
Gary North: On March 11, I spoke at the annual Austrian Scholars Conference, sponsored by the Ludwig von Mises Institute. It was gratifying to see so many attendees that they could not fit into one room.
The Mises Institute is a high-tech outfit. They set up a video camera, and the speech appeared on monitors in other rooms. It will also go on-line within a few days. This will be free. Anyone in the world with Web access can see it from now on. This is a great model for communication and education.
My topic was "Keynes and His Influence." My goal is to recruit half a dozen bright young scholars to begin a joint project in refuting Keynes' "General Theory of Employment, Interest, and Money" (1936) line by line. I have set up a department on my Website to this end.
1. Keynes' influence has been indirect (mediated). 2. His legacy will soon be uniquely vulnerable. 3. Only the Austrians called the 2008 recession. 4. It is time for a comprehensive refutation of Keynes
THE MOST INFLUENTIAL MODERN ECONOMIST
There is no question that John Maynard Keynes was the most influential economist in the 20th century. Yet his influence has been different from what economists and the intelligentsia have believed...
The key to Keynes' influence was the 1948 textbook written by Paul Samuelson, "Economics." It became the most widely assigned college textbook in economics. It had no major competition for at least three decades, and its competitors were also Keynesian in outlook.
Samuelson promoted Keynes' ideas, but he used a very different format. He did not quote Keynes at length. He presented what has since been called the neo-Keynesian synthesis. He applied Keynes' fundamental principle of deficit spending in the Great Depression to apply to the overall economy in a post-depression world. He really did try to make general the "General Theory," which the book had not been...
Keynes' "General Theory" has long been an unread book that sits on the shelves of economics graduate students and professors. No one actually has read it except specialists in the history of economic thought. The book is close to unreadable. Compared to his earlier books and essays, it is uniquely unreadable. We do not see its formulas quoted as proof of contemporary policies or recommended policies. The literature cited in economists' footnotes is what we can legitimately call Keynesian, but this literature is an extension of Keynes' work, not Keynes' actual work...
We should compare "The General Theory" to Charles Darwin's "Origin of Species." Darwinists rarely quote Darwin to support their latest papers. They cite him as the originator of the idea of evolution through natural selection. Attacks on Darwin's actual exposition are shrugged off by his followers as irrelevant. We find an entire school of Darwinists who preach an idea that is opposed to what Darwin taught: the "punctuated evolutionism." Darwin believed in tiny changes over long periods of time. They believe in huge changes in brief periods of time. Still, they call themselves Darwinists. Why? Because they believe in his Big Idea: purposeless, random causation prior to man.
The same is true of Keynes' "General Theory." It was Keynes' primary idea that dominates the thinking of economists: government budget deficits as the means of overcoming economic slumps. As to simple formulas and concepts in the book, modern economists rarely cite them in professional journals. If one or more specifics of the book are refuted, his supporters shrug it off. Keynes' influence relates to the one big idea, just as Darwin's influence does...
Keynes recommended government spending and employment by government. He did not recommend central bank bailouts of large banks. He focused on fiscal policy, not monetary policy.
The biggest banks were saved by these interventions. Small banks continue to go under, Friday afternoon after Friday afternoon. The banking industry as a whole has contracted its loans to commercial and industrial firms. Banks have added over $1 trillion to their excess reserves at the FED, thereby sterilizing money. This is anti-Keynesian: a restriction of spending, meaning a reduction in aggregate demand compared to what would otherwise have been the case.
Keynesianism as an idea has received a shot in the arm -- mainly with fiat money, not Federal deficits. Yes, the deficits have been enormous, just not by comparison to central banks' money creation. The deficits are unprecedented, all over the world. Yet the economic recovery is universally criticized as weak.
If enormous deficits are not serving as stimuli for widespread recovery, then what credit should Keynes get? Keynesians are saying that government policies kept the world economy from collapse. But this is not the same as saying that the policies have restored prosperity. They haven't...
It is also clear that unemployment will not be significantly reduced by the present recovery. The Keynesian tools are not working. They have not worked in Europe for a generation, where life on the dole is permanent for 10% of the work force.
When the bust comes, the Keynesians will take the blame. They have demanded credit for the recovery, and they have received it. They are consuming public favor today. They will pay for it later.
"WE TOLD THEM SO!"
The Austrian School's representatives predicted the recession. The defining moment was Peter Schiff's debate with Art Laffer in 2006. Schiff said a crash was coming. Laffer ridiculed him. Because of YouTube, this story will not go away.
It never does any good to go to the losers and say, "I told you so." It does a great deal of good to go to the general public, which is always in search of leadership, and say, "We told them so." You don't convert true believers and spokesmen very often, but you can undermine their leadership.
The Austrian theory of the business cycle was the tool that enabled Schiff and others, such as me, to predict in 2006 that a recession would hit in 2007. It did -- in December 2007. We told them so. This establishes our credentials, but more to the point, it establishes Ludwig von Mises' credentials. He thought that economic logic alone was necessary to defend a position. But in political debate, having the numbers demonstrate that you were right is also necessary...
Who will still be standing to pick up the intellectual pieces? The Chicago School economists did not predict 2008. They did not defiantly protest the FED's bailouts of September and October. Neither did public choice economists, rational expectations economists, or behavioral economists. They all climbed aboard the Good Ship Keynes, which was in fact the Good Ship Bernanke. The Austrians did not.
The Austrians, few in number, are the last men standing to challenge the Keynesians. This is their great opportunity. They have waited a long time.
GOING ON THE OFFENSIVE OFFENSIVELY
As W. C. Fields said so long ago, "Never give a sucker an even break." This also applies to bloodsuckers. The Keynesians are apologists for the bloodsucking class: tax collectors, deficit-expanders, and boondogglers of all shapes and sizes.
I have set up http://www.keynesproject.com/ to help mobilize the guerrilla troops in a comprehensive assault Fort Keynes. This is a supplement to the vast collection of free books and materials found on http://www.mises.org/, especially the books in the Literature section of the home page.
There has to be a full-scale assault on the "General Theory" that shows how it is illogical, line by line. This has been done sporadically in the past, but not systematically. To oppose Keynes' overall system was to commit academic suicide.
When the decks are cleared, then there must be a systematic critique of the post-Keynes literature. But this is too large a job for a handful of scholars. It will take at least a decade to produce the basic critique of Keynes. My hope is that this project will be complete in time for the crisis produced by today's policies.
To persuade the next generation of economists and talking heads that Keynes was wrong, and therefore his apologists are wrong and have been wrong, we need two things: (1) a body of material in all the media that shows that "The General Theory" was a con job from day one; (2) an economy universally suffering from the effects of the policies that have been justified in the name of Keynes. Since we are going to get the second, why not work on the first?
CONCLUSION
We have lived in the shadow of Keynes since 1936. That shadow has darkened academia for over 70 years. Keynes justified what politicians and salaried academic bureaucrats always wanted: more power for politicians and tenured bureaucrats.
Keynes justified this system of parasitic bloodsucking. The bills are now coming due. The voters are going to join a tax revolt against these bills. They will seek justification. Austrian School economics is best positioned today to offer that justification. To become even better positioned, a younger generation of Austrian School economists must publicly gut "The General Theory." Read the whole article...Gary North at garynorth.com
The rational and humanitarian enlightenment of the 18th century did much for the welfare of mankind, but little to promote the securities of freedom. Power was better employed than formerly, but it did not abdicate.
In England, politically the most advanced country, the impetus which the English Revolution gave to progress was exhausted, and people began to say, now that the Jacobite peril was over, that no issue remained between parties which made it worthwhile for men to cut each others' throats. The development of the Whig philosophy was checked by the practical tendency to compromise. Compromise distinguished the Whig from the Roundhead, the man who succeeded from the man who failed, the man who was the teacher of politics to the civilized world from the man who left his head on Temple Bar.
The Seven Years' War renewed the interrupted march by involving America in the concerns of Europe, and causing the colonies to react on the parent state. That was a consequence which followed the Conquest of Canada and the accession of George III. The two events, occurring in quick succession, raised the American question.
A traveler who visited America some years earlier reports that there was much discontent, and that separation was expected before very long. That discontent was inoperative whilst a great military power held Canada.
Two considerations reconciled the colonists to the disadvantages attending the connection with England. The English fleet guarded the sea against pirates; the English army guarded the land against the French. The former was desirable; the latter was essential to their existence. When the danger on the French side disappeared, it might become very uncertain whether the patrol of the Atlantic was worth the price that America had to pay for it. Therefore Montcalm foretold that the English, if they conquered the French colonies, would lose their own. Read the rest... Lord Acton at Mises.org
U.S. GOV'S FINANCIAL CONDITION CONTINUES TO DETERIORATE!
Somebody Tell Moody's!
Michael Pollaro: As President Obama, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid round up the final votes on the trillion-dollar-plus health care bill, the U.S. government reported a record monthly deficit in February of $221 billion.
Nasty stuff.
No matter receipts are down 7% from the same period last year, the U.S. government continues to spend at 2009’s record rate. The result, a deficit of $652 billion. That means the U.S. government is tracking to a deficit of $1.5 trillion for fiscal 2010, about 10.5% of GDP. That’s worse than 2009’s 10%, itself a post war record. All this, even before Obama’s Recovery and Reinvestment Act spending largesse kicks in, in earnest.
Ouch.
So what’s new here? Nothing. This continues a government spending and borrowing binge that quite simply seems to have no end.
GEORGE REISMAN ON A SOLUTION TO OUR BANKING PROBLEMS
[This is long, but definitely worth reading-- flynn]
The following is a speech delivered by George Reisman at the Ludwig von Mises Institute's Mises Circle in Newport Beach, California on November 14, 2009.
Good Afternoon, Ladies and Gentlemen:
As you all know, we are in a severe economic downturn. The official unemployment rate now exceeds 10 percent and according to many observers is actually substantially higher. Within the last year or so, our financial system has been rocked to its foundations. The collapse of the housing bubble and the numerous defaults and bankruptcies connected with it brought down major financial institutions, such as Bear-Stearns, Lehman Brothers, and Merrill Lynch. It also brought down numerous small and medium-sized banks and threatened to bring down even such banking giants as Citigroup and Bank of America. The Dow Jones stock average fell from a high of 14,000 to about 6,500. Important retailers such as CompUSA, Circuit City, Mervyns, and Linens ‘N Things went under, as did countless small businesses throughout the country. Practically every shopping mall gives testimony to the severity of the downturn in the form of vacant stores.
The collapse of the housing bubble and the massive losses and mounting unemployment that have resulted from it have unleashed a veritable firestorm of hostility against capitalism, in the conviction that it is capitalism and its economic freedom that are responsible. It is now generally taken for granted that any solution for the downturn requires massive new government intervention, to curb, control, or abolish this or that aspect of capitalism and its alleged evil...
On this day in 1349, in the midst of the infamous Black Plague epidemic, the forces of government, science and academia came together with a plan to save the people. As you recall from earlier episodes, the Black Plague had spread from the eastern Mediterranean throughout most of Europe killing millions over the preceding three years. People searched everywhere for the source of the plague…..a heavenly curse; a burden of immigrants; the result of spices in the food. It was tough to figure however, since whenever they held a conference either the host area caught the plague or the visitors did…..so…..not too many conferences.
Then in the six months preceding this date the death rate leveled off…..or seemed to. So in castles and universities and town halls across Europe, great minds pondered the cause of the plague. And they came pretty close. The collective governmental/academic wisdom was that the source of the Black Plague was fleas - (absolutely correct). So the word went out from town to town across Europe - to stop the plague - kill the fleas -by killing all the dogs. And immediately the slaughter of all dogs began.
But like lots of well-intentioned governmental/academic ideas it was somewhat wide of the mark...and had unexpected consequences. The cause was fleas alright but not dog fleas…..it was rat fleas. And in the 1300's what was the most effective way to hold down the rat population…..you guessed it - dogs. So by suggesting that townsfolk kill their dogs, the wise authorities had unwittingly allowed the rat population to flourish and thus a new vicious rash of Black Plague began. Before it was over, three years later, nearly 1 out of 3 people in the world had died of the plague.
To mark this eventful period, take time to review your public servant’s plans for your welfare.
Charles Goyette joins Thomas DiLorenzo, Robert Murphy,
Douglas French, and Jeffrey Tucker
Speaking in Phoenix April 10, for the Mises Circle
From Ancient Rome through modern-day America, money inflation has been the means by which the state extracts wealth without recourse to taxation. Such a monetary policy leads to gutting savings, punishing investment, and the launching of economic cycles and even soaring prices and banking disasters. But perhaps the greatest cost is in human liberty itself. The intellectual tragedy here is that few make the connection between the quality of money and the rise of despostism.
This Mises Circle is devoted to exploring the relationship and providing a path toward permanent freedom.
Admission is $85 per person and this includes lunch. Through the generosity of James M. Rodney, each attendee will receive a complimentary copy of Henry Hazlitt's The Inflation Crisis and How to Resolve It.
Statement of Congressman Ron Paul United States House of Representatives Statement for the Record February 25, 2010
Madame Speaker, I would like to enter into the record the following letter from Professor Robert D. Auerbach, a professor at the LBJ School of Public Affairs at the University of Texas. This letter provides additional information regarding remarks I made at yesterday’s Financial Services Committee Humphrey-Hawkins hearing, remarks which Federal Reserve Chairman Bernanke categorized as “bizarre.”
I thank Congressman Ron Paul for bringing to the public’s attention the Federal Reserve coverup of the source of the Watergate burglars’ source of funding and the defective audit by the Federal Reserve of the bank that transferred $5.5 billion from the U.S. government to Saddam Hussein in the 1980s. Congressman Paul directed these comments to Federal Reserve Chairman Ben Bernanke at the House Financial Services Hearing February 24, 2010. I question Chairman Bernanke’s dismissive response.
BERNANKE: “Well, Congressman, these specific allegations you’ve made I think are absolutely bizarre, and I have absolutely no knowledge of anything remotely like what you just described.”
The evidence Congressman Ron Paul mentioned is well documented in my recent book, Deception and Abuse at the Fed (University of Texas Press: 2008). The head of the Federal Reserve bureaucracy should become familiar with its dismal practices. Read the rest... Robert Auerbach
At the recent Conservative Political Action Conference in Washington, the winner of the straw poll was Congressman Ron Paul. One of his best-known positions is support for a return to the gold standard. David Frum, a former speech writer for George W. Bush and a fellow at the conservative American Enterprise Institute, responded by blaming the gold standard for the Great Depression.
"Threatened with the exhaustion of its gold supply," Frum said, "the government felt it had no choice: It had to close the budget deficit. So, in the throes of a severe downturn, the U.S. government did exactly the opposite of what economists would otherwise advise: It cut spending and raised taxes — capsizing the economy even deeper into depression."
But as the table below shows, that version of the history of the Great Depression is entirely fictional. David Friedman at Investors.com
Remember David Frum? He was the Bush speechwriter who tried to convince the world that Sunni Iraq, its enemy Shia Iran, and North Korea were in some strange World War II-style alliance which he named the "Axis of Evil."
Okay. So David Frum, from a perspective of near economic imbecility, does a hatchet job on Congressman Ron Paul.
In response, from a perspective of knowledge, Dr. Gary North shows him how it's done, by doing a hatchet job on Frum:
"David Frum is a hatchet man. If he were to spend the rest of his life in rigorous journalistic training, he might make it to hack status. Maybe."
