Proof Nobody 'Gets It' About Economy

Mitt Romney, replying to a question by Gayle King on CBS This Morning said, "Well, of course, we have to have regulation on Wall Street and on every street to make sure that our economy works well..."

Do we, Mr. Romney? We cannot call our system 'free enterprise' when that phrase, meaning an economy run by the forces of the market place, is instead run by political ideology. It doesn't matter if we mean your ideology or Obama's or Marx's. If an economy isn't free of politics, then you can't use the phrase.

On the self-declared Marxist website Political Affairs, author John Case discussing science-based economics wrote, "You cannot ever make economics non-political." However, he then goes on to explain how libertarian, Austrian-school economics is not political. He even states unequivocally that "The 'Austrian School' is the opposite of a data or evidence driven framework." Case cites Paul Samuelson's Keynesian economics as "a more scientific framework for economics." Case doesn't like libertarian economics.

Austrian economics is exactly the opposite of government's Keynesian-driven 'evidence', dealing exclusively instead with business evidence, the kind business people deal with on a sometimes hour-by-hour basis. Business professionals make decisions based on whatever they need to know when they need to know it, such as the rising prices of their materials or the falling price of their goods, or of their competitor's goods; the cost of transportation; the cost of labor, etc. These are not the things about which a government should worry; in fact, a government which protects men's rights ought to stay completely away from the things business professionals need to worry about.

A free nation needs to worry about protecting society from men who set out to bilk victims and receive ill-gotten gains, not about men working within legitimate market forces. Artificially affecting market forces makes the economy less able--in some cases impossible--to operate. When a government manipulates market forces using the evidence it chooses to see, it has no objective basis on which to set those manipulations. What objective standards could it possibly use since it is not operating a business?

As one example, should government help the trucking industry maintain status quo rates to prevent drivers from being laid off, or leave it alone so that producers can ship more cheaply, thereby creating more jobs or paying workers more (or both)? How can competition properly lower production and consumer prices, when government helps trucking companies maintain their current rates instead of letting market forces determine those?

But not even the conservatives like Romney seem to get this fact. Paul Ryan is nothing more than a conservative who attracts Tea Party labeling by being less progressive. Romney's desire to 'regulate every street' makes him sound very threatening. Does he mean such things as retaining the corn ethanol requirements, part of the Renewable Fuels Standard, that caused farmers to sell or slaughter livestock this summer because corn became so expensive when the drought prevented corn and wheat from growing? Using corn for ethenol is predicted to cause the price of our food to rise by as much as 14% in 2013.

(Read how farmers switched from growing white corn to yellow corn, "making the base of most Mexican foods unaffordable." What happens in one place, affects other places. Should things be affected by honest markets, or political ideologies?)

Economist Richard M. Salsman wrote in The Objective Standard, "There is a lagged influence between academic economics and public policy, but increasingly since the 1970s academic economists have recognized that free markets work, that 'market failure' reflects poorly defined and ill-protected property rights, and that boom-bust cycles and sapped prosperity are consequences of bad public policies."

He uses as examples of 'academic economists' the Nobel Prize winners F. A. Hayek of the 'Austrian-school' of economics (1974), the idea of 'monetarism' from Milton Friedman (1976), 'rational expectations' from Robert Lucas (1995) and Thomas Sargent (2011), the 'public choice' of James Buchanan (1986), and of supply-side economics by Robert Mundell (1999).

These are the economics that John Case and other Marxists, and progressives like President Obama and Hillary Clinton, abhor. Let's see whether Romney and Ryan come anywhere near such "academic" standards as those which advocate a really free economy.

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© Curtis Edward Clark 2012

Why I (Partly) Suport the Tea Party

While I do not support the morally offensive religious views of most of the members of the Tea Party, the fact that they are the libertarian bulwark against conservative and liberal economic policies means that I do support them on the libertarian issues they address.

They represent the best hope for their claim to support

• Fiscal Responsibility 
• Constitutionally Limited Government and
• Free Markets

For that reason I am allowing their fundraising efforts to have a place in my blog today.
https://www.teapartypatriots.org/donations/?ref=HF89

I wrote last week on Tuesday that "It doesn't matter how large government becomes, when it's doing only what is proper to its powers according to the Constitution." Those three bullets above, properly administered, will still yield a larger government than the Founders could imagine, and larger than even Teddy R., FDR, or JFK could imagine. (I do see LBJ imagining how large his Great Society could get out of control.)

And so long as the Tea Party can successfully demonstrate they can accomplish what they set out to do, I will support them in any way I can.

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© Curtis Edward Clark 2012

'Network Society' Seems Anti-Individualistic

It would seem natural to think that a phrase like the 'network society', even capitalized, would merely refer to a world connected by the links of computerized networks. To some extent that is true. Ericcson, the Swedish technology company, says on its website that the network "will fundamentally change the way we innovate, collaborate, produce, govern and sustain." 

But something called the Centre for Personal Sovereignty claims that this network society "resembles laissez-faire capitalism combined with the better promise of Marxism."

First I would ask what the 'better promise' could possibly be if it is not the individual existing free of government interference in the market-workings of his enterprises. The term 'free market'...means free of government's aggressive force, said Reason Magazine. 'Regulation' of industry is often necessary, such as in labeling, where we don't want two products called 'aspirin', one of which is not acetylsalicylic acid; where we want to be assured that our meat is properly handled before packaging; where a Doctor has the necessary knowledge and competence to practice what we believe he says he can. But regulation of the market place, ala Marx, helps no one and hurts all.

This "network society" in general is not an economic system: "The impact of this revolutionary political system," the Centre says, "though today existing only in theory, can already be calculated."

Of course it can. I can calculate that because it is a political system that it will contain government interference, legal plunder and legally aggressive force. After all, it "maximizes market efficiencies" instead of letting the market finds its own way of doing that.

"Unlike capitalist systems," the Centre says, "in a Network Society the 'people' as individuals fully own their personal means of production. One's compensation is directly proportionate to one's value as we all become economic and political 'free agents'." 

They also say "it also represents control over your own means of production - that is, you will learn to reap the full economic value derived from what you do, rather than giving that value to your boss. A business owner that earns a profit from the efforts of her employees will be reaping the excess rewards derived from the synergistic efforts of the entire group (1 + 1 = 3). This excess value represents the value of the owner's ability to orchestrate the efforts of independent parts towards a productive end."

This gobbeldy-gook of twisted language leave me with questions:

• If you can still have a boss who "reaps the excess rewards", how is it different from capitalism?
• If you still have a boss, how do you "fully own your personal means of production", and if you do, why pay anything to a boss, let alone have a boss?
• How is the "synergistic" efforts of "the entire group" (what group?) any different from a normal workplace today?
• If an employer is the one who knows how to "orchestrate the efforts of independent parts towards a productive end," why is s/he reaping "excess rewards"? How can they be "excess" when s/he is doing essentially what the owner of his "personal means of production" will be doing; is that person not also reaping "excess rewards"? In excess of what? In excess of who's rewards? Why can't someone keep all his own rewards?

It all reminds me of Ayn Rand's criticism of Kant, when she said he "originated the technique required to sell irrational notions to the men of a skeptical, cynical age." We are living in such an age, and the technique keeps going and going.

After all, it would seem that my blogging and authoring a book to be sold only on line for E-readers would be the very thing Ericcson and the Centre and others are discussing. But it scares me to think that they want to include what I do in their crazy scheme of "the better promise of Marxism."

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© Curtis Edward Clark 2012

Obama's Economic Collective

President Obama's recent remarks about how people didn't do things on their own is not the first time he has slammed individualism, and raised the specter of a collectivist-thinking mind. "If you’ve got a business," he said, "you didn’t build that. Somebody else made that happen," he said, in his now famous remarks on interdependency.

In December of 2011, at a speech in Osawatomie, Kansas, Obama said that a free market "speaks to our rugged individualism and our healthy skepticism of too much government." But he followed that by saying, "It doesn’t work. It has never worked."

He went on with other remarks: 

• "We simply cannot return to this brand of 'you’re on your own' economics if we’re serious about rebuilding the middle class in this country." 
• 'It results in an economy that invests too little in its people and in its future."
• " I’m here in Kansas to reaffirm my deep conviction that we’re greater together than we are on our own."
• "Factories where people thought they would retire suddenly picked up and went overseas, where workers were cheaper."

These remarks are the message of 'social justice' that the President has worked for his entire political life. But if you're not "on your own", where are you? Are you in a work environment made impossible for management by government regulations?

How does an economy "invest in its people"? I worked in a profit-sharing company where the idea was that we were greater together. But the slackers always lowered my shares and sometimes left me with nothing. If I had owned my own shop and my own welder I would have made more money, so how was standing in that factory part of being something "greater"?

And the only reason for a factory to go where wages are cheaper, is because something is preventing them from paying lower wages here, thereby keeping the jobs here. You can't have that fact both ways. It's either-or.

The President wants an America in which everyone plays by the same rules, as he said in his 2012 State of the Union Address, which was--over and over again--about 'economic fairness'. Yet, he injects tax-payer's money into companies he likes, in order to change the competition in the supply-and-demand market.

Like all good progressives Mr. Obama wants to see the playing field change. So is must be asked, what does he think is happening when an upstart company makes big inroads into someone else's industry? The only true 'economic justice' to be had is when the distribution of capital moves from what the buyers wanted to what they want now. That is not something that can be forced by government. E-85 was mandated by the Alternative Motor Fuels Act of 1988, 24 years ago. Yet in most parts of the nation, you have to go online to look for stations that sell it.

What if government could force a market to rise from little—or from nothing? "We are all painfully aware of the Soviet style mandate that requires 10% of petroleum to be comprised of ethanol.  This unconstitutional mandate has killed jobs, driven up the cost of fuel and food, lowered gas mileage, and damaged car engines," said RS RedState.

Power Industry News wrote that "The Environmental Protection Agency has slapped a $6.8 million penalty on oil refiners for not blending cellulosic ethanol into gasoline, jet fuel and other products. [C]ellulosic ethanol does not exist. It remains a fantasy fuel. EPA might as well mandate that Exxon hire leprechauns. So far this year, just as in 2011, the supply of cellulosic bio fuel in gallons totals zero." [Emphasis added]

Is it fair for a President--or anyone who controls the tax purse--to determine what should be forced on the unconsuming public? Do you not think that $6.8M penalty doesn't mean jobs are lost? What about a safe pipeline not allowed from Canada, and wells not drilled in the Gulf, and ore mines not mined in Alaska? Why are those concepts of 'economic justice' the very sort this President destroys?

If the rules of the market do not "speak" to rugged individualism, why destroy individualism? Why not destroy the rules that prevent individualism in the market? Why not create rules that allow competition?

© Curtis Edward Clark 2012