Hayek Trumps Rothbard: Free Market in Money, not Fiat Gold


ALL VALUE is a “mutually shared illusion” in the marketplace.

What we need is not for a socialist government to force us to all use Fiat Gold, which is what Rothbardian faux-Austrians claim, but instead to have a free market in currency, like Hayek and the real Austrians have long said.

Money is an accounting tool, it has its own intrinsic worth as a means of facilitating and measuring trade and value. If you saddle it with some secondary function and valuation, like forming jewelry and USB connectors, then you end up with an even more unstable economy, as the value of the money becomes less predictable, changing with the supply and demand of that secondary commodity.

This is why we had bigger, worse economic downturns from 1873-1934, on the gold standard, and our best overall period of growth from 1973-2001, when we left Breton Woods and had not yet encountered the massive, Hoover-like growth of government under Bush.

Advertisements

Keynes is Dead, Long Live…Keynes?


Each time a government has tried to spend its way out of a depression, the result has been ongoing economic failure

John Maynard Keynes was an economist…or at least a political activist who used economic-sounding arguments to justify government intervention.

In the 1930s, he was THE economist, if you believed in that government intervention.

But, as we all know, his Theory proved to be a complete failure. It failed to produce results during the Great Depression, but staggered on until the 1970s, when it failed so spectacularly, causing staflation, that it was pronounced dead, even by Liberals in the US and open socialists around the world.

But, unfortunately, George Bush came along in 2001, and after having run as a free marketer, governed as a Keynesian. He infected the political scene with the premise that you could stimulate an economy out of a downturn, by having the government spend massively, even as it increased regulation (in part, by putting strings on the spending). When the economy fell into trouble because of his bad foreign and domestic policies, he responded with Stimulus and Bailout™ packages. That trademark, of course, means that he must pay the Keynes estate a royalty for each mention.

Obama, having run as the Anti-Bush, has committed the perplexing political suicide of simply building on every Bush precedent…most of which really are more Liberal Democrat in tenor, anyway…and one of the symptoms is that he continued the Stimulus and Bailout™ packages.

The problem, as we predicted and is now proving true, is that stimulus spending and bailouts don’t help the economy: They hurt it.

This pattern of behavior has caused what people denying the word Depression call a “double dip recession”, which we’re entering (again) right now.

The only way out, is to end the Keynesian meddling, and let the economy grow on its own. Japan and Sweden learned this the hard way, after each suffering a “lost decade” in the nineties. Now it’s our turn.

Bunning (Almost) Fights Unemployment


When you subsidize anything, you get more of that thing. Including unemployment.
I have a friend who got fed up with his job, and gave it up because he felt collecting unemployment was a better option. This, alone, is evidence of how unemployment benefits increase unemployment…but it gets worse:

He eventually got tired of not working at all, and got a job one day a week, just low enough not to cut into his unemployment benefit.

Here comes the “worse” part.

His employer liked him, and kept begging him to work full time…but he planned to kick back and relax until unemployment ran out. That’s right, benefits not only caused him to CHOOSE to be unemployed, but to refuse to take a full-time job, keeping him on the unemployment roles. But at least it would eventually run out…right?

  • Then Bush and Congress decided to extend it.
  • Then, when it was about to run out (again), Obama and Congress extended it once more. My friend has ended up living off the taxpayers, indefinitely, while his employer dreams of GIVING him full time work.
  • Then Jim Bunning decided my friend must go back to work. His employer must have been thrilled.

Not that Bunning is a principled Conservative, who believes in not subsidizing unemployment. No, he is just a partisan RiNO grandstanding against unfunded government spending…now that Bush isn’t the one spearheading it.

Which may be why he caved in, just a short time later. My friend gets to remain a burden on society, unemployment gets to remain artificially high.

Ever wonder how much of the 10% unemployment is simply people who CHOOSE not to work, because the government subsidizes not working?

What we need is more people in Congress who are actually like Jim Bunning was pretending, for a few hours, to be.

%d bloggers like this: