I would like to discuss a previous thread by one of our anonymous posters who wrote “about the only thing of note that I haven’t mentioned is the hysterical meltdown of those on the libertarian side of things to just about any government reaction to the current crisis” and I stress the word “any”. Peter Hitchens is apparently “one of the very worst offenders”, someone whom I have quoted a couple of times, “an hysterical female-like counterpoint to his deceased brother”. He is apparently “dancing around with his hands in the air in mortal abject terror of any government imposed change to his daily routine whatsoever” (my bolding). You can read the whole thing for yourself here.
I cannot speak for Peter, but will speak for myself. And I am already all too aware how readily all too many are prepared to throw away their freedoms at the mere whiff of some socialist grapeshot. You want to hear the sound of hysterical, try this:
Our responsibilities at the moment are to sit tight and do our best to not add to the problem. Yes we are suffering some discomfort. Yes, we are also taking a financial hit. Yes, some people are taking a bigger hit than others, either due to their own unpreparedness or suffering the ill fortune of this being very bad timing. But what are governments supposed to do? Take everyone’s individual circumstances into account? Even if they could, which they cannot, exactly why should they?
Our great handicap is that so many of us are conditioned to looking to government to solve our problems. So that when a very big event such as this happens then our only recourse is to scream and shout that something must be done or must not be done as the case may be. But the situation is not normal and screaming at the sky is beyond useless. What we must do is batten down the hatches and rely on ourselves and family and communities first. We must find ways to get things done.
I never classify myself as a libertarian, but I do line myself up ideologically with F.A. Hayek who is, like myself, a classical liberal, a conservative using today’s mode of classification. On Hayek’s attitude to governments in a crisis, Steve Hayward went into that just this morning: HAYEK ON EMERGENCY POWERS OF GOVERNMENT. This is a direct quote from Hayek’s Law, Legislation and Liberty. The bolding this time is from Steve Hayward.
The basic principle of a free society, that the coercive powers of government are restricted to the enforcement of universal rules of just conduct, and cannot be used for the achievement of particular purposes, though essential to the normal working of such a society, may yet have to be temporarily suspended when the long-run preservation of that order is itself threatened. Though normally the individuals need be concerned only with their own concrete aims, and in pursuing them will best serve the common welfare, there may temporarily arise circumstances when the preservation of the over-all order becomes the overruling common purpose, and when in consequence the spontaneous order, on a local or national scale, must for a time be converted into an organization. When an external enemy threatens, when rebellion or lawless violence has broken out, or a natural catastrophe requires quick action by whatever means can be secured, powers of compulsory organization, which normally nobody possesses, must be granted to somebody. Like an animal in flight from mortal danger society may in such situations have to suspend temporarily even vital functions on which in the long run its existence depends if it is to escape destruction.
The conditions under which such emergency powers may be granted without creating the danger that they will be retained when the absolute necessity has passed are among the most difficult and important points a constitution must decide on. ‘Emergencies’ have always been the pretext on which the safeguards of individual liberty have been eroded – and once they are suspended it is not difficult for anyone who has assumed such emergency powers to see to it that the emergency will persist. Indeed if all needs felt by important groups that can be satisfied only by the exercise of dictatorial powers constitute an emergency, every situation is an emergency situation. It has been contended with some plausibility that whoever has the power to proclaim an emergency and on this ground to suspend any part of the constitution is the true sovereign. This would seem to be true enough if any person or body were able to arrogate to itself such emergency powers by declaring a state of emergency.
Speaking for myself, I feel in many ways I am already living in a police state. Very benign for the moment, but they are only just starting to get used to the idea of using the police to take away our historic rights. What has amazed me more than anything in this latest episode is how few people actually seem aware of how much is at stake. There are a handful of deaths from the coronavirus but we are not in the middle of the Black Death. What we may well be in the middle of is the death of our personal freedoms. There are plenty around who would like to take them from us already and who they are ought to be visible to us all since they never stop threatening us for going out to take a walk in the park. Once you are used to that, who knows what will come next?
People on the right understand economics better than people on the left
The science is settled. This is the article, Economic Enlightenment in Relation to College-going, Ideology, and Other Variables: A Zogby Survey of Americans, for which this is the abstract.
ABSTRACT We present results of a December 2008 Zogby International nationwide survey of American adults, with 4,835 respondents. We gauge economic enlightenment based on responses to eight economic questions. A number of controversial interpretive issues attend our measure, including: (1) our designation of enlightened answers; (2) an asymmetry in sometimes challenging leftist mentalities without ever specifically challenging conservative and libertarian mentalities; (3) our simple 8-question test is merely a baseline and does not gauge the heights of economic enlightenment; and (4) a concern about response bias—namely, that less intelligent people would be less likely to participate in the survey. Even with the caveats in mind, however, the results are important. They indicate that, for people inclined to take such a survey, basic economic enlightenment is not correlated with going to college. We also show economic enlightenment by ideological groups—the “conservatives” and “libertarians” do significantly better than the “liberals,” “progressives,” and “moderates”—and we show that the finding about education holds up when we look within each ideological group (with perhaps the exception of the “conservative” group). We discuss possible explanations for the finding that economic enlightenment is not correlated with going to college. We also report simple findings for the relation between economic enlightenment and each of the following variables: 2008 presidential vote, party affiliation, voting participation, race or ethnic group, urban vs. rural, religious affiliation, religious participation, union membership, marital status, membership in armed forces, NASCAR fandom, membership in the “investor class,” patronage at Wal-Mart, household income, and gender. We have opted to keep the reporting direct and simple—we have not applied any weights to the data. We do not report any regression results. We make the data available online as a linked appendix and invite others to explore the data for findings beyond those reported here.
This does not relate to my students – “Possible Explanations for the Lack of Correlation between Economic Enlightenment and Going to College – but it is easy enough to understand given what you find in a standard introductory text. This, from the conclusion, seems exactly right.
We advise students and parents to beware of economics-principles courses that either stress blackboard models divorced from judging important policy positions, or that are hostile to classical liberal thinking and values. Students and parents should understand that while academic economists are, relative to other faculty, more attuned to economic enlightened, a substantial majority vote Democratic and maintain an ideological character in line with that of most of the humanities and social-science faculty. In selecting schools and courses, students and parents need to drill down to the individual professor, and investigate his or her webpage and course syllabi. [My bolding]
The economics of wish-fulfilment will ruin any understanding of how an economy works. You can only become a top economic advisor if you can find a major politician to give you a job. That’s where the problem begins, but there is more to it. It is in some sense because no one can rise in an economic institution unless they preach Keynesian macro and marginal analysis in micro, both of which will prevent anyone from making sense of how an economy actually works.
Article found referenced here.
Containing viral inflation is a process that must begin right now
I am about to quote John Maynard Keynes with approval, from his 1919 Economic Consequences of the Peace.
Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
I do not actually believe that Keynes ever resiled from that belief which is why towards the end of his life he is reported to have said, “I am not a Keynesian.” But whether he was or he wasn’t, it now seems everyone else today still is. The biggest mystery to me till now has been why these policy makers in Treasuries across the world have not tried to finance the huge increases in public deficits by cutting the public sector wages bill, at least for the “non-essential” workforce. It finally occurred to me today why governments have left public sector wages alone.
With their “stimulus” packages, immense gaping budgetary holes have been created through stopping dead a large part of the economy, in this way losing immense tax revenues while funding tremendous increases in their outlays. I believe they have left public sector wages alone because they believe it is important to maintain demand as the economy sinks into recession. They seem to believe their zero-productivity workforce can maintain the level of aggregate demand, while employees within the actually productive parts of the economy – the ones employed by the private sector – have lost their jobs and their incomes with a massive fall in their ability to spend as much as they previously did.
Naturally, those same public servants, the ones who are advising our governments, believe how important it is that they keep receiving their full salaries even though their own decisions have mutilated the livelihoods of millions across the world, both among business owners and their employees. It is disgusting and maddening. Were it not for the absolute junk theories their heads are filled with, this would be as obvious as the day is long.
Our governments have now done two things simultaneously. They have cut production (Q) while pouring money (M) out into the economy. So let me take you to a bit of ancient economics that has never been refuted since basically it is an identity, absolutely true because it cannot be otherwise. This is known as the Quantity Theory of Money. As an equation, it states that P = Mv/Q – the more rapid the amount of money in circulation (M) especially if the increase in the stock of money is coupled with a fall in output (Q) the more rapid the rate of inflation will be. There is also “v” which is an indication of how fast each unit of money passes from hand to hand, “v” standing for “velocity of circulation”. Which leads to this conclusion that no economist denies:
The price level increases with every increase in the amount of money in an economy relative to the amount of output being produced and bought. The faster the money supply grows while output is being cut back, the greater the rate of inflation must be.
And as a matter of policy, that is just exactly what we are doing. We are increasing the amount of money being spent while reducing the amount of goods and services available to buy. The outcome will be an inevitable large increase in the rate of inflation.
There is absolutely no reason, given the potential for runaway inflation following the policies we are now about to endure, to leave public sector wage rates untouched. They must be reduced as a matter of both equity and economic necessity.
The correct policy given our circumstances, a policy which I fully endorsed from the start, was to fill in the income losses for those who lose their jobs, but only for those who lost their jobs, so that they could continue to buy what they need. This is not a stimulus. We are obviously not trying to grow the economy. This is just to make sure people are still able to buy what they need and to pay their bills. The same necessity was to reduce business costs wherever possible. A business without revenue because the government has shut them down and deprived them of their customer base, should have its tax bills deferred along with assistance provided to cover their outgoing costs while they are in shut-down mode, such as taxes, interest payments and rent.
To hammer private sector employees while leaving public service wages untouched is an outrage. It defies explanation for governments to leave untouched the public service wages bill while forcing private sector employees out of their jobs. The only equitable policy is for every one of us to share the sacrifice. It is beyond explanation for the government to hammer private sector employees and leave the public sector earning the incomes they continue to earn.
There is then the inflation that is to come. This inflation will only be contained only if it is understood by one and all right now that when this emergency is over that interest rates will have to rise to stop inflation from rising by soaking up the excess liquidity that has now been unleashed. Unless, of course, the aim really is to destroy the capitalist system.
No way forward other than into a wilderness
This is a discussion of FDR’s Christian foundations when speaking to the American people. From Steve Hayward at Powerline. His aim is to get PDT to quote FDR along religious lines. Think how this might stew a few minds.
FDR, an Episcopalian, made the kind of remarks about religion that send the American Civil Liberties Union into paroxysms of rage when someone like George W. Bush or Sarah Palin say the same thing today. Democracy and Christianity, he said, were “two phases of the same civilization.” “We cannot read the history of our rise and development as a nation,” he said, “without reckoning with the place the Bible has occupied in shaping the advances of the Republic.” During World War II FDR wrote a preface for an edition of the New Testament that was distributed to American troops: “As Commander-in-Chief, I take pleasure in commending the reading of the Bible to all who serve in the armed forces of the United States.” On the eve of the 1940 election, FDR said in a radio address: “Freedom of speech is of no use to a man who has nothing to say and freedom of worship is of no use to a man who has lost his God.” On June 6, 1944, FDR led the nation in prayer for our armed forces on live radio, and in his final inaugural address in 1945 he said, “So we pray to Him for the vision to see our way clearly … to achievement of His will.” Today’s liberals would regard these statements and acts as grounds for impeachment.
And really, are all Democrats now atheist? Are they anti-religious? Have they all lost their God? These are people with whom there is no possibility of communication. Whether they know it or not, they have lost their way and for whom there is no salvation. They may think there is an answer in politics, but on this they are absolutely wrong and for whom there is no way forward other than into a wilderness.
The politics of the left has many ways to kill you
This is just one. They do not care about you or anyone else at all. All they are interested in is power for themselves.
Personally I think it’s mostly politics but some people think it’s all politics. It’s getting harder to tell all the time.
Let me add this for further context: Time for a second opinion.
We are trying to stave off and arrest a pandemic. Given what is being recommended, we think we need some second or third opinions. This pandemic, now that it has reached America, has taken 3,173 lives here. This, from a tested population of 164,359 cases. That’s a mortality rate of 1.9%. But immediately, questions must be asked. We record every case of death from the coronavirus, but we have no idea how many people have had the coronavirus. Clearly, there are more than 164,359 cases because not everyone has been tested. That would put the mortality rate at less than 1.9%. That rate could be far, far less. As Eran Bendavid and Jay Bhattacharya, professors of medicine at Stanford, have written, based on their model of over 6 million cases they believe exist: “That’s a mortality rate of 0.01%, assuming a two-week lag between infection and death. This is one-tenth of the flu mortality rate of 0.1%.”
The data are American, of course, but could just as well be the death-to-infection rate everywhere.
Law of Markets 