I'm Back; Great Depression

I've been gone for a while as school came to an end, but it ended last week (I got two A's for sure, including one in Macro Economics) so I'm back. I've encountered a crap load of idiocy lately so hopefully will have a lot of things to write about, and my only problem will be to figure out how to separate the subjects into manageable and readable articles.

Until then here is the research paper I wrote for my English class this semester.

For a little back ground, the paper is on the Great Depression, a topic I choose because of its relevance today with the current depression, blah blah blah. The length assigned was six pages, I wrote 8. I separated it into four sections: Causes of the Great Depression, Hoover, FDR and WWII.

We went over Keynes a lot in my Macro class so I couldn't stop from writing about four pages on Keynes and the the causes, I also wrote about 3/4th of a page on the Austrian Theory of the Business Cycle, which I talk about a lot on this site but don't explain very often. Because, of the long first part I skimped on Hoover, FDR and WWII giving each of them only about a page. I believe this is alright because as the paper evolved it turned into two parts: how the government caused it through the bank credit expansion and then how the government prolonged it, where I used opportunity cost

(which was borrowed from about 7 different books I read. In the class we had to give presentations on the sources we would use in the paper, my presentation was basically explaining five books no one had ever heard of and then saying I know about 40 others no one has ever heard of [other than economists, hard-core Austrians, etc.] and I don't know how to narrow it down. I then preceded to handle 15 minutes of non-stop questions which somehow morphed from gov. intervention in the Great Depression to the plausibility of anarchy, suffice it to say I doubt anyone who was truly paying attention will look at things in the same light again)

to show how markets weren't allowed to correct themselves. (How'd you like that blockquote idea with the huge parenthesis thing there, genius idea, huh.)

The paper is in PDF form, you can download a reader here and read it here

Mike

Liveblogging Meltdown Ch.1 The Elephant in the Room

When I went to Florida on Spring Break this year I tried to buy Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse, By Tom Woods (my favorite author by the way) for a few relatives at three different book stores, well all of them were sold out and the last even mentioned the publisher is completely sold out.

So these posts (one for each chapter) will be mainly for those relatives for whom I could not buy the book, remember these will in no way live up to the book, not even close, so make sure you buy a copy as soon as it comes back out.

Chapter 1 - The Elephant in the Living Room

The stock market has been falling since last fall, and, predictably, just about everyone is blaming it on too much free markets and not enough regulation.

Woods shows that no one even mentions the Fed or the one percent interest rates, that is except for Jim Rogers, James Grant, Peter Schiff and the members of the Austrian School of Economics - those who predicted the crisis that is.

The government's cure for the crisis? More of the same of course, bigger government and more regulation masquerading first a s republican and then as ' hope and change.'

In the book Woods promises to show how the Fed screwed up the economy by manipulating interest rates and how the only school that predicted the crisis, the Austrian School, is also the only one which has a viable solution.

Defending Peter Schiff

Peter Schiff is probably, right now, the fore most advocate of Austrian Economics, so when I saw one of the financial bloggers I read ripping him, I thought I'd need to post a reply.

What if one hundred years later: the little town has expanded to take up a whole country, and as the government took control of money and made it illegal for anyone else to produce money the majority of the citizens in the country stopped saving and got jobs in the service industry, contracting out most of the manufacturing jobs to another country across the sea, as they were doing this a lot of them paid for this using money obtained on credit from the second country.

Also, while all of this was happening, the government who had a monopoly over the money forced billions of it into the banking system and bullied them into lending it to people to buy houses who could not pay it back.

Then, the banks repackaged the loans and they were sold as AAA debt?

A bubble would be created in housing prices, because so many people would be bidding for them that the prices would shoot up, then as a result of the prices shooting too high builders would build even more houses, and people would start trying to speculate on the houses, using mortgages with no money down.

Once the housing prices dropped even a little all the speculators who had 'bought' houses with no money would just walk away and foreclosures would spiral upwards, then the money would start coming due to those who would not afford them in the first place.

As the housing prices were falling and foreclosures were mounting the idiots who bought the repackaged debt would face huge losses, which in the free market is the only signal that says stop doing what you're doing the market thinks the resources should be allocated elsewhere.

This is what happened in America, and Peter Schiff, Ron Paul, Lew Rockwell, Tom Woods, Walter Block and every other Austrian Economist predicted it starting in 2002 when the fed started decreasing the interest rates.

Yes, a broken clock can be right twice a day, but when a group of hundreds of economists and hundreds of thousands of their students have used logical theory to predict every recession or depression in the 20th century in any country and to explain all those before, it is most likely because they are correct.

Also, a few more things:

Schiff does not think everything in our economy would be going to zero if the government stayed out of it, he believes the malinvestment, which you mentioned as an overabundance of investment that didn't perform, would be liquidated and we would be out of it, this is what happened in 1920 and even after production dropped 21% in one year the downturn only lasted about a year and a half.

By 'plowing' money into the system the only thing that happens is price inflation and a perversion of incentives that tells bankers they can take whatever risk they want because the government will be there to back them up. These companies that are being propped up are too big to be allowed to stay alive, our already screwed up economy cannot take so much money being wasted on crap, when the money should be allowed to be allocated to more efficient firms and people who if they earn a profit would be, by definition, helping society.

With your debt in a 'real' economy, that would be correct, but in America we are no longer manufacturers so the money we borrow from China goes back to China and other Asian countries to produce things or to service industries who will in turn spend it on more service industries or more things from outside the US. When this happens the debt is not invested in anything, so a lot of won't be paid back.

We had the gold standard for a few years of the depression, but ti wasn't effective because FDR and Hoover did bank holidays and effectively canceled it out before FDR killed the gold standard and just banned owning gold at all outright in 1934.

The War did not get us out of the depression, it was the end of the war and the end of government spending that got us out of the depression in 1946.

And as for Schiff's investment record, he cannot reveal it because he was not an investment adviser until this year, but from what I've read most of his clients fell less than the stock market did last year the guy who showed Mish his portfolio invested like a week before the peak and sold out his whole portfolio like two weeks after the trough.

In his book Schiff said that the foreign markets would likely fall with the US until they decoupled, and he advised holding a lot of cash until then, so to imply he was totally wrong with his investment advise because he had a bad 6 months, which he predicted would happen, and got a chance to average into his investment is not very logical, especially for a value investor.

Also, Schiff is effectively a value investor, a few weeks back on his podcast one of his researchers at his firm was interviewed, and they do fundamental analysis on each stock they recommend, forecasting its cash flows and only buying those with low multiples and high dividends.

-

More to come later, I will be 'live blogging' Tom Woods' new book Meltdown.

Say's Law; Job 'Creation'; Private Defense; Profit & Loss

Free Speech Board

The question has yet to be changed, so a new answer was very poignant this week:
I’ll tell you what is not (desirable) this question still being up here.

Also, someone wrote that people should get rid of the delusion of equality because people are inherently unequal, which is a huge positive.

Macro

This week we talked about Say’s Law, which basically says in a market system: as an entrepreneur supplies things he creates his demand for what other’s supply. At first savings (Some deluded Keynesians still believe this, including one of my more ignorant roommates) was thought to be a leakage in the system, until it was shown that savings creates the capital which businesses use to create supply, this is correct.

However, a guy named Malthus came said there is still a leakage in the cycle, when money is hoarded, however this is also incorrect.

Those who read this blog should be familiar with the fact that inflation is an increase in the money supply, this pushes the prices up. Conversely, when money is taken out of a system deflation is the result and prices fall correspondingly.

But, the amount of money taken out is so infantile it would take a while for the market to respond, you may say. This is possibly true, but then it must also be true that money hoarded does not represent a big enough amount of the money supply to create a depression as well.

Government Job Creation

A lot has been talked about in the news lately about the ‘jobs that Obama will be ‘creating.”
This is a huge fallacy, and an easy one to see. As Henry Hazlitt and Frederic Bastiat observed to create a correct economic framework, one must not look only at the short range consequences for one group of people, but at all the consequences for every group of people.

For the supposed job creation it is necessary to remember that government cannot create any sort of wealth it can only redistribute wealth. In the same vein the government certainly cannot create any jobs; it can only redistribute the jobs from where the free market thought they should be, so by definition the jobs will be unproductive and contribute nothing to society.

Private National Defense

I’m skipping the movie review this week, to finish my review of Bob Murphy’s Chaos Theory
In his private defense essay Murphy again uses insurance as his basis for how a free market could provide defense.

He stars with the example of an earthquake, if people lived in an area with earthquake risk, they could get insurance to protect their interest if there was an earthquake. To protect itself the insurance company would charge lower rates to those who had home that would serve better in an earthquake and would make sure people went to a safe place in the event, or forfeit their claims.

The same theory can be used for national defense, people could get insurance against attack, where the insurance company would pay for any damages and would pay money to their estate if they were killed.

With competition defense companies would be created and used by insurance companies to lower the risk of attack.

After this explanation, Murphy shows how the Calculation Problem (which I used in my defense of Anarchy) makes it so government defense cannot work efficiently (what would you rather have? A private company defending you to as efficiently as possible or people you don’t know forcibly taking your money and using it to spend $600 on toilet seats?).

Profit & Loss

Profit & Loss is a three-part, 56 page essay by Ludwig von Mises.

In the essay Mises shows that those who condemn profit without referring to loss are missing the point; entrepreneurs must face profit and loss in their business, in order to have the privilege to allocate scarce resources away from other uses they must earn a profit, if they do not they are run out of business, by operating at a loss.

This system makes it so that those who run big businesses can only stay that way by satisfying the public (which in a voluntary economy earning a profit would mean that one satisfied his customer, or they would not do business with him) and earning a profit, instead of condemning big business it should be revered, if the business was not making the lives of society better it would no longer be a big business.

Profit & Loss is a good quick read, especially good for those who wish to convert ignorant Keynesian or socialist friends to the correct economic way of thinking.

Quote of the Week

Life, liberty, and property don't exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place. ~Frederic Bastiat

Sources, this week

Equality; Price Controls; Chaos Theory; The Patriot

Free Speech Board

The question was is equality good.

The only answer as of this writing was, “Equality is always desirable, but maybe not always attainable.”

I believe one thing should be equal: everyone’s property rights. Nothing else can be held equal without initiating force.

Also, I do not understand what the fetish is with equality, people were made differently, and can do different things better than others. That’s just how it is! This stupid idea that there should be equality of opportunity or equality of outcomes is absolutely contrary to nature and should be dropped for a more logical philosophy that will have better logical outcomes.

Macro

We just took the test on the market model, so I thought I’d talk about artificial price ceilings and floors.

Ceilings

A price ceiling is when the government says no one can charge more than a certain amount for an item. For example the government may say that gas cannot cost more than $2 per gallon.

What then happens is the firms who sell the gas will supply the amount they would have if the
actual market price was $2, so some companies who could only profitably sell gas at $3 per gallon will stop selling. At the same time consumer demand for the gas will go way up because they can buy it at only $2 per gallon, so people who would only buy $20 before will fill up their tanks and people will speed up faster and drive more, thus more gas will be bought than before. So as the supply falls because firms cannot make money of the current price, the demand will sharply rise and buy up all the gas, thus there will be a shortage. Anyone who lived through the ‘70’s should remember this happening.

Floors

The best example for a price floor is minimum wages; currently the government says no one can sell his labor for less than $6.25 per hour.

So what happens is many people go out and try to find jobs paying this amount or more, upping the supply, but the firms who before purchased the labor for less than $6.25 will no longer demand the labor, and a surplus, or unemployment, of labor will be created.

Maybe, an easier explanation would be corn: (I have no idea what the price of corn is) say the government puts a price floor on corn saying people cannot charge less than $200 for it. Farmers would then en masse start growing corn to earn the higher profits on it, while at the same time people would change to eating green beans and other things instead of the expensive corn, the result, way too much corn than is needed and many farmers who need money to buy clothes and water, but instead have a crapload of corn.

The lesson: anytime government screws around with prices it takes away the proper market signals that show how much should be supplied of products and create shortages or surpluses of those products.

Chaos Theory

Chaos Theory is a little known book by Robert Murphy, who is the author of the PIG to Capitalism, it is just 55 pages and contains two essays by Murphy on the mechanicals of a stateless society.

The essays are on Private Law and Private Defense.

So far I’ve only had time to read the Private Law essay, but I’ll post on the Defense part next week.

In a stateless society everything would be owned privately, by definition, Murphy says that it would be in the interest of everyone who owns property to put in a contract that everyone who enter the property cannot steal, murder, assault anyone, etc. If anyone breaks the contracts they would be subject to a fine, considering the trial of a private court or arbitration firm.
To make sure all the fines would be paid it would be likely that ‘crime’ insurance companies sprang up, and businesses would only allow those with this insurance on their property.

The insurance companies would proceed to only grant policies to those who they believed would not commit crimes (if someone already did commit the insurance company may say we’ll only give you the policy if you stay in a private jail).

I have some objections to this (what’s to stop people from just entering the property without signing a contract, and what about rich people who could just afford the fines) so I’m going to re-read it, but at least form what I now understand its seems logical and plausible.

The Patriot

The Patriot is a story of Benjamin Martin, a character partly based on the “Swamp Fox,” Francis Marion, who is considered the founder of modern Guerilla Warfare.

The movie can be looked at very well from a libertarian perspective. It starts out with Martin’s son joining the Revolutionary army and being taken by the agents of the big British government, who proceed to kill another of his son who runs after the soldiers.

Martin then takes vengeance finding the road on which the British soldiers were and, with two of his younger sons, killing all of the Brits guerilla style and taking his oldest son back.
Martin joins the army and throughout the movie he uses his wits and knowledge of the land to cripple the British Big Government army in his area.

It is important to point out that the Revolutionary army was basically anarchic in the Revolutionary war, there was, as of yet, no government for them to follow. And as Murray Rothbard pointed out if a bunch of farmers and blacksmiths could voluntarily join an army and beat the best army and navy in the world who could possibly take over the whole of Americans, all of which will know their land better than any attacking force.

Quote of the Week

Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping towards destruction. Therefore, everyone, in his own interests, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interests of everyone hangs on the results. Whether he chooses or not, every man is drawn into the greatest historical struggle, the decisive battle into which our epoch has plunged us.
– Ludwig von Mises

Worst Crime; Keynes; Inclined to Liberty; Stimulus

New Article Layout

I’ve been using a layout for the articles for a while; I thought I’d show what will go into the articles each week, from now on (not in any discernible order):

• Free Speech Board
• Macro Economics Class
• Economic Subject
• Short Book of the Week – Eventually this will just become book of the week
• Libertarian Movie of the Week – This will be a new feature where I examine a current or past movie that has libertarian leanings
• Quote of the Week

Free Speech Board

The question this week was, “What is the worst crime a person can commit?”

There were a bunch of heinous answers, like, “Download music illegally,” or, “Be a member of the Republican party,” along with some obvious ones including molestation, rape and murder.
My opinion?

I believe the worst crime that can be committed is to forcibly steal money from workers, under the penalty of imprisonment or death, and use that money to go half way around the world and murder civilians in a country the majority of the workers could not even point out on a map.

Then again, the State commits or has committed the most heinous crimes imaginable many more times than any one person has.

Macro

I got into a (very) minor scuffle with my Professor today (don’t worry it was all words), when he asked if anyone knew who Maynard was (he was talking about Keynes). Here’s how it went down:

Me – He was a dumb economist.

Prof – DUMB! You can’t get by in this class thinking that.

Me – You were talking about Keynes, right?

Prof – We won’t be talking about anyone dumb in this class. How can you say that? He was named one of the 6 most influential intellectuals of the last century.

Me – By who though?

Prof – Sigh…. Economists.

After that he went back to reviewing for our test. I have a number of points on this:
It’s possible (probable) that I should have held back on my amazingly quick wit, and said, “The guy whose theories prolonged the depression by twenty years,” or, “The guy whose every work was demolished by Austrians, mainly F.A. Hayek and Henry Hazlitt.” Unfortunately in my haste to be the first one to answer the question (in a class where I doubt anyone else had any idea what the hell was going on) I just said, ‘dumb.’

Keynes changed his mind basically every two years, F.A. Hayek destroyed his Treatise on Money to the point that Keynes agreed that it was wrong. Hazlitt wrote a line by line refutation of Keynes’ General Theory. Also, he misstated Say’s Law then proceeded to say it was wrong and base his whole theory on it.

Every single time Keynes’ theories have put into practice bad economic things have transpired.

Finally, Keynes may have had a high IQ or been intelligent in areas other than Economics, but economically he was a fool, and one who has caused many lives to be lost. Calling him a genius, or calling any other wrongheaded idiot a genius for that matter, just distracts from the fact that he was wrong and serves little or no benefit to anyone, what so ever.

Inclined to Liberty


Louis E. Carabini believes there are two types of people in the world: those who wish to live their lives on their own minding their own business and those who wish to rule over other people.

He’s shows in his book that those who say, “No one should be allowed to own a Yacht,” or “CEOs get paid way too much,” or “no one should be allowed to inherit wealth,” are in effect saying, “The government should not allow people to own a yacht,” “The government should not allow people to choose how and when they interact with each other,” and “The government should not allow people to choose how to allocate their wealth.”

Carabini applies this theory to many topics, in the book’s 35 chapters, but only 107 pages. The book can be read in probably an hour or two, but still leaves the reader with much more ammunition with which to fight the crazies than he had before.

Mall Cop

TJ and I ironically both saw Mall Cop on the same weekend, even though we live several states apart and did not communicate about seeing the movie.

The movie was surprisingly good, it stars Kevin James as mall security cop, Paul Blart.
Blart is still in the mall when a group of bad guys take it over and attempt to steal the ATM receipts from all of the stores. Though he is in no way a traditional action hero, Blart manages to use his own form of Guerilla warfare to take out all of the bad guys, except the leader.

At the end of the movie he catches up with the leader at an airport, as he is trying to leave, and it is shown that the S.W.A.T. team leader, who had been interfering with Blart (or at least attempting to) throughout the movie and was a bully to Blart during High School, is in with the bad guys.

It was extremely refreshing to see a movie that did not have the same cliché genius government cops and idiot criminals. When government has a monopoly on defense two things are always bound to happen:

1. Inefficiencies abound because the government has no profit/loss to calculate how and when to spend money. Because of this policemen are not paid what a market rate would be for the risk and skill involved in their profession, so many of them will need to get money on the side.

2. When a government troop goes bad, the only people who can stop him are other government troops. Everything and anything will be done to make the situation less embarrassing to the government.

Stimulus Bull

Robert Murphy has a great analogy for the stimulus:

If an allergic man is stung by a bee what should you do? Give him the freedom to go to the hospital and give him some a Benadryl or hold him down on the ground, don’t let him move, and take blood out of his leg and inject it into his arm?

The reason we are in a depression and have inflation above 16% is because government screwed around with the money supply in 2002. Right now the market needs to be free to go through a recession to get rid of all the mal investment made because of the false interest rates.

This is not what is happening, instead the government is propping up all the failing companies, the crappy companies that the market needs to kill and then redistributing money to try to ‘stimulate’ the economy.

At a time when more savings is desperately needed in a country with a negative savings rate, the government is taking the money away from those who save the most and redistributing it to those who will just spend it, thinking this will somehow help the economy.

God help us.

Quote of the Week

When the government fears the people, it is liberty. When the people fear the government, it is tyranny.

– Thomas Paine

Thomas Aquinas is the pseudonym of a free-market loving college student located in Salt Lake City, Utah.

Don't Get Excited Over House Republicans Unity

By TJ Madison

All I've been hearing on talk radio the last few days is how great the House Republicans are, because none of them voted for the so-called "stimulus package" proposed by Barack Obama.

I can guarantee it that if John McCain had won the presidency and proposed a very similar bill in Congress, most of the House Republicans would have voted for it.

And how do I know that? Because approximately 99% of those Republicans were in the House of Representatives at the same time George W. Bush was signing bills that called for extravagant levels of spending the past eight years.

What!? Do You actually think that all Republicans in the House had a sudden attack of 'common sense' and 'frugality' at the same time? Don't get me wrong, I want this 'stimulus bill' to fail, but if you can't see this as mostly political posturing, you're just a shill for the Republican Party.

There is only a handful of 'Ron Paul Republicans' in the House that are still purveyors of constitutional-limited government. Most of the Republicans consider themselves conservative when they want to get re-elected; other's are just RINO's (Republican in name only) mainly from the northeastern part of the country.

Even as I consider myself Republican, I would probably give more credit to the eleven Democrat members of the House who voted against the bloated stimulus package. It took a lot more 'marbles' for a Democrat to vote against Barack Obama than any Republican.

I hope I'm not the only person on the Right to be cynical about the House Republicans. I'm going to need more than just one vote opposing the "worst piece of legislation in the history of the universe".

As for the Senate, they have yet to pass their version of the bill, but you can bet that the the Republicans in that body of government will vote about the same as the House Republicans. They won't get 100% of Republican Senators to vote against Obama and the stimulus package, but most Republicans will vote against it, and we on the Right will praise them, too. Conveniently forgetting they're the same Republicans that voted in favor of socialism over capitalism the last eight years.

Is this news? Maybe not, but it's very disturbing to me that capitalism has taken such a big blow under a Republican administration. I realize that no Republican administration in the last century has been ideologically 'pure' when it comes to free markets, but I never thought that it would be a Republican president who thought it be best to "abandon capitalism in order to save capitalism".

Honestly ask yourself this: why now do the House and Senate Republicans think this stimulus bill (and government in general) are too big? Is it because it's a Democrat proposal? Or is it because they've 'magically' remembered that they're supposed to be the defenders of capitalism, and not the enemy?

TJ Madison is a pundit living in Fond du Lac, WI. He works in the health-care industry and fights 'creeping socialism' on a daily basis. He hopes this criticism of Republicans will score some points with his blogging partner, Thomas Aquinas.

Macro; Protectionism; Abortion; Hazlitt

Macro Economics & The Free Speech Board

I’m enrolled in Macro Economics this term, from what I’ve heard the professors at my school are overwhelmingly Keynesians; the very separation of Macro Economics from Micro Economics is contrary to the Austrian School, with which I place myself, so this semester I will be posting, each week, what I learned in the class and whether I agree with it or not.

The Free Speech board has, unfortunately, only had ‘how to get better’ topics so far this year, hopefully nest week I can post about it again.

Protectionism

One of the biggest challenges I’ve faced while debating about libertarianism is related to protectionism, which basically means stopping other countries from trading with the US or stopping US companies from exporting jobs out of the US.

The biggest arguments for this, which are related, are:

Americans will lose jobs
This is a first level problem; that is, it is a problem with people only looking at the first level of the situation, but not looking further.

When jobs are exported or companies lose business as a result of foreign competition Americans will likely lose jobs, that’s how it works. However, it does not just stop there, the people don’t lose their jobs and then go live on the street and starve to death, while all other variables stay the same; the world is not just some senseless Twilight Zone episode.

After these jobs are transferred overseas Americans are allowed to move into jobs which make more economic sense (because the wages are bidding their scarce labor into them) and they probably prefer (if they liked their old job enough they would have taken a lower wage).

Also, the moving of these jobs increases the specialization and division of labor; it is similar to someone moving up the ranks in a company. Just as it would be possible and more efficient for a CEO (one who worked his way up from the bottom) to do a job in the factory, but it is too expensive and nonsensical for him to do this job when he would do a lot better running the company, it would be possible for Americans to do certain jobs but it makes more sense for those jobs to be allocated elsewhere.

Dumping

While the first argument is for stopping American companies from sending jobs out of America, the second is for instituting tariffs to keep foreign companies out of American markets (which in turn force the loss of American jobs).
It is an extremely fallacious argument to contend that it would be bad foreign companies to compete at all with American companies. Competition is the reason the free markets works well, consumers choose which ever product they feel is best suited to their needs, if that product is made by a foreign company, then so be it.

The argument with dumping is that a foreign company (supported by the government or not) will sell goods to American consumers at less than cost to gain market share, and then raise the price to levels unaffordable to Americans.

This should take, at most, a few minutes of thought before the argument is tossed away. The company in question would need to drop prices so low to completely push all other competitors out of business that not only would it be likely to ever happen, but it would take years to gain the money back, during that time there is nothing stopping the old competitors from coming back or new entrepreneurs from entering the business and competing with the dumping company. Also, I find it hard to believe a company could sustain while losing this much money to push competitors out of business.

Even if dumping did work and happened how could it logically be stopped? There is no real possible way to find the cost a company has in making something, its future goals and how it decided on its price.

Abortion

During the past few weeks I have been struggling to reconcile my beliefs against abortion and its legality with anarchism.

At first I thought there’s no way abortion can be illegal, a baby can be an unwanted presence who is an invasion and a parasite. Though many pro-lifers will deny this statement, it is technically true (in some cases, when the mother does not want the baby) and it is extremely not useful to take one sheltered look at something, without considering the other side of the argument.

If a bum walked onto someone property and stole his food and refused to leave, in libertarianism, it would be within someone’s rights to kill that man, or at the very least make him leave, which could possibly result in his death.

How then can the illegality of abortion be justified?

Let’s go back to the bum, what if the owner of the property had forced him onto the property and he had no way to escape? It would then not be legal for the owner to kill the bum.
In the same vein it should be illegal for a woman to kill the baby who she and her partner have created.

Economics in One Lesson


This book, by Henry Hazlitt, is perhaps the most prolific in leading people into the Austrian School. Hazlitt was not an economist as much as he was a journalist; he edited Mises’ Human Action and also wrote a book, The Failure of the New Economics, which refuted Keynes’ General Theory line by line.

In this book Hazlitt uses his ‘one lesson,’ which is, in a policy, to look at every outcome for all groups of people, not just the immediate outcome for one group. He then proceeds to apply it to all the popular policies of the day, which coincidentally are all pretty popular today as well.
Hazlitt’s book holds up very well today, and is a great way to introduce the free-market economics which are usually contrary to what one first thinks about policies. Plus the book is less than 200 pages long so it can be read in a couple of days or weeks, even by the busy libertarian.

Quote of the Week

It is error alone which needs the support of government. Truth can stand by itself.
– Thomas Jefferson

Dictatorial Impulses

By TJ Madison

When I first heard about Barack Obama's executive orders in his first few days as president, I really wasn't surprised. Although, five in three days is unprecedented, leftists will tell you it's necessary because "we live in unprecedented times."

Unprecedented times? I remember my mother and I driving to two consecutive gas stations in the late 1970's, only to be told by the attendant: "Sorry, we're out of gasoline!"

Having no gas for your car-- now that's unprecedented.

The energy policies of Jimmy Carter scarred my mother for life. Even to this day, whenever I get in her car, the gas tank is on 'E'. She's still afraid to go to gas stations.

Getting back to executive orders, you know damn well that if George W. Bush would have signed five in three days, Democrats would be screaming, "look at that tyrant, who does he think he is?"

Of the five presidents before B.O., executive orders went as follows: Bush '43' had zero in his first nine days. Caligula, better known as Bill Clinton, signed two in his first five days. Bush '41' did not sign any in his first five days. Reagan went seven days before issuing any and Carter, the worthless one, issued only one in his first ten days. Now, I'm not sure what you can take from these facts, but one thing is for certain, of all of the last six presidents, B.O. appears to be the one most ambitious to make a power grab in his first few days in office.

Now to be fair, executive orders have been in existence since 1789. However, in the nineteenth century; for a president to issue even thirty in his entire term was unusual. It wasn't until the twentieth century that pure dictatorial power of the executive went far more reaching then any Founding Father could have intended. The truth is, executive orders can have legitimate functions. Presidents can carry out their constitutional duties or direct their subordinates by executive order. But they can also be source of temptation for overly-ambitious presidents (who can that be?), by using them as a substitute for formal legislation. Thereby circumventing the constitutional process.

But, if you're Saint Barack of Chicago, the constitution doesn't apply to you anyhow. Just like it didn't apply to one of your hero's, FDR. Who carried out 3700+ executive orders! To put that into perspective, Bush II signed 282, Caligula had 364 and Reagan 381 in their eight year terms. Jimmy Carter managed 320 in only 4 years!

I will not defend any of these men when it comes to executive orders; they are all guilty of usurping power from the other branches of government. But, Barack Obama is heading towards the dictator status of FDR when it comes to abuse of power.

Now, when it comes to current controversial laws, you can easily make a legitimate case to say the Patriot Act is unconstitutional, to which I agree. However, at least it went through the legislative process.

Point being, by signing an exorbitant amount of executive orders, a president becomes a government unto himself, bypassing all the checks and balances of a representative-republic form of government.

TJ Madison is a libertarian-Republican pundit living in Fond du Lac, WI. His day job is working in the health-care industry. The preceding column is solely the thoughts of TJ Madison, and not necessarily that of anarchist, Thomas Aquinas or any other contributors to AgentsofLiberty.com.

Is Saying 'God' Now Unconstitutional?

By, TJ Madison

Here we are one week from the Presidential Inauguration, and I find it humorous what people will find time to get worked up about.

"I do solemnly swear that I will faithfully execute the Office of President of the United States and will, to the best of my ability, preserve, protect, and defend the Constitution of the United States... So help me God."

Now, if you were an intelligent American, is there any possible way, you could have a problem with any of the words in the Presidential Oath?

Well, they found an idiot that does.

With everything that's going on in this country right now, trillion dollar deficits, a war on two fronts and a long recession ahead of us, there's an atheist activist, Michael Nenow, that has made it it his own personal crusade to remove the words, "So help me God", from the January 20th inauguration of Barack Hussein Obama. A U.S. District Court Judge will actually hear this frivolous lawsuit next week.

If anything, some American should sue the President-elect, citing that his campaign promises are a direct contrast of that entire Oath. Every promise Obama has made about education, health-care, the environment and several others are, by definition, unconstitutional.

I challenge any leftist to find the words: education, health-care or the environment in the Constitution. And when you can't find them, refer to the Tenth Amendment, "...powers that the Constitution did not delegate to the United States or prohibit to the states were reserved to the States respectively, or to the people."

Nenow's ultimate goal, of course, is to rid the entire public square of all things religious. While citing the 'separation of Church and state' mantra, so frequently used by the godless socialists of the left; a mantra that is not in the Constitution, Bill of Rights, Declaration of Independence or any other important historical document.

For the record, even though I do not attend church regularly, I strongly believe in God, and I don't have any problem with atheists-- as long as they have a love for individual liberty and free markets.

Groups like the American Civil Liberties Union have a lot of card-carrying members in the libertarian movement and that's fine. Though I will never understand why, seeing that the ACLU is a fraud and is no friend of liberty. Those libertarians may see it a little different however, they choose to ignore the nation our Founders wanted.

It is clear that the Founders did not want a Theocracy. However, by ACLU 'standards' of today, the Declaration of Independence could never had been ratified in it's current form with a word like 'Creator' included.

In fact, every session of Congress begins with a prayer by a preacher, who has been financially compensated by the taxpayer since 1777. So ask yourself this: if the Men who actually wrote the Constitution didn't have a problem with a paid preacher, why in the world would it be deemed unconstitutional to utter the words 'So help me God' in an inauguration?

It's not unconstitutional. It's just ridiculous and petty, like the entire leftist movement.

TJ Madison is a libertarian-Republican pundit living in Fond du Lac, WI. The views are his own, and not necessarily those of all contributors at AgentsOfLiberty.com

My Case for Anarchy

I received this e-mail from TJ:
________

TJ Madison to me show details 7:09 AM (15 hours ago) Reply

I had an idea for you to include in your next article.

I thought you could expand on your anarchism. I believe most people have an ignorant idea of anarchy, and maybe you can explain that it's more than just lawless teenagers with bones in their nose and purple Mohawks.

Just throwing it out there.

--
tj2
Stop Creeping Socialism
http://agentsofliberty.com/

________

I am against the idea of purple Mohawks (on a purely aesthetic basis) so I thought I’d take an extra day, make this an extra-long article, and show why I believe in anarcho-capitalism. I like to separate this into two areas in my head, which I’ll call economical and moral in this article.

My Economic Reasoning

Before I begin I’d like to point out that I’m not near intelligent enough to come up with this stuff on my own, even though it may seem that way with my potentially poor explanation, and I will give some further reading at the end of this section or those who wish to see my sources and explore these theories deeper.

To start I need to explain the profit/loss measuring stick used by entrepreneurs. In a free market prices are used to dictate where scarce resources (any resource that is) are allocated, this happens when people who demand the resource more pay more for it (the resource is then allocated to those people). Through the chaos of a free-market and millions of transactions prices do a magnificent job of allocating resources to their best use, somehow in the end there is order and there are an extremely small amount of shortages, because when the demand for a certain good goes up, the price follows and as entrepreneurs are encouraged to find better ways to find the materials, or even enter the business, the higher price allows the producer to pay more for his necessary materials which allocates them away from other areas. This happens every second of the day as the market adjusts.

Because prices dictate where scarce resources need to be allocated entrepreneurs have a very easy measuring stick as to whether the market thinks the resources should be allocated in the ways they are using, this is profit and loss. If an entrepreneur is operating with a profit it means the market wants the resources to be allocated to that use, if not the then the market thinks there is a better use, and without any government intervention it just about always eventually diverts to that use (because the entrepreneur is losing money).

Before I go on here's a summary of the above: Because resources are scarce those who demand them the most pay higher prices, those higher price allows the market to allocate the resources in the best way, following this entrepreneurs will know how the resources should be allocated by their profit or loss.

The great economist Ludwig von Mises came up with the Calculation Problem Argument that said, basically, without this profit or loss measuring stick anything operating without the use of prices has no way of knowing if what they are doing is actually working.

Before going further it is necessary that the readers acknowledge that government does not operate on a profit/loss system if some area of government needs more money they give it more money through inflation of taxation, other than these two sins government has no way of getting money.

As a result of the two things in the preceding paragraphs government logically does not and literally cannot work in any way.

This does not mean there should only be government roads or defense or courts, it means that government cannot work in any way.

Moral Reasoning

Libertarianism is essentially a connecting of two things: a non-aggression axiom and property rights.

The non-aggression axiom says it is fundamentally wrong for anyone to initiate force; it is basically the Golden Rule and is a must in basically any religion.



Property rights say that every man has a right to his property, property being something with which one has mixed his labor or for which he has traded. “Thou shalt not steal,” covers this in my book.

As with the economic reasoning this logically must be taken as an absolute (for the Jews or Christians there is not a footnote after the ten commandments, explaining when to use them, they are to be used at all times).

Now, remember the two ways government can sustain itself: inflation and taxation, let’s explore these two.

First, inflation, inflation is the increasing of the money supply (many people think inflation is rising prices, this is the result of inflation, not the definition). The increasing of the money supply is essentially counterfeiting (regardless of who does it). Because this allows some people to get something for nothing I am morally against any form of inflation, and in fact believe that the abolishing of the federal reserve and return to a commodity money is what should be done, but that’s for a different article.

Second, is taxation, taxation is basically a fancy word for theft; it is the forceful taking of money. If you think there is no force involved, try not paying your taxes.

Now, combining: the fact that the only way the government can get money is by stealing, either through direct taxation or inflation, with the necessary absolutism of bringing together a non-aggression axiom with property rights in every single case it is morally impermissible for a government to exist. Even if government did somehow work economically I would still be morally against it for these reasons.

Many people simply do not take this moral argument to mind when they think about government or anarchism, the next time you think about how good the national defense is or about how good it is to have welfare, then ponder if you think it is OK that this was done, by definition, through the forceful stealing of someone else’s hard-earned money.

Conclusion

In conclusion if I have not converted you to my way of thinking I at least hope you no longer may think I am not just a lawless teenager with a purple Mohawk and a bone in my nose (well an extra one).

Further

Most of the reading I have done in this subject was done with printed articles whose links were subsequently lost, here are some of the things that survived, even if it isn’t as comprehensive as I would have liked.




Site Updates

I’ve changed the appearance of the main site. I tried to make it look cleaner and changed the positioning of some aspects.
With the update I created a new poll which asks the reader’s take on anarchy after taking in my arguments, please vote in the poll and then comment on this article with your take.
Also, the short book series will be back next week as my next recommended book goes along with the upcoming economic topic.

Quote of the Week

“On the free market, everyone earns according to his productive value in satisfying consumer desires. Under statist distribution, everyone earns in proportion to the amount he can plunder from the producers."
-Murray Rothbard

New Years Resolution: How About More Liberty!

By, TJ Madison

My father was right.

As long as I can remember, My Dad (Pops Racer) always made sure he went to bed BEFORE midnight on New Year's eve. It was his way of letting us know that it was a waste of time to stay up, just to see the calender change to January. One could chalk it up to spite, but actually, for as long as I can remember, he's never been up past ten o'clock on any other day of the year, so why should New Years Eve be any different?

Because! It was New Years Eve! The calender is no-longer going to say 2008 anymore. It will be 2009 now! Can't you see how exiting that is?

It took me about 35 years into my life, but now I know how 'lame' those statements really are.

I think it still could be exciting for a teenager to stay up, waiting for the countdown until midnight with their siblings. It's sort of like believing in Santa Claus when you're a child. When you get in your 20's, it's just another reason to drink and be stupid. Like people in their 20's need another reason to drink and be stupid, they already have St. Patrick's Day, their birthday, all their friend's birthdays, and every Friday and Saturday night of the year.

That's at least 120 days per year to get drunk and act stupid. And if you're attending a major university, you can double that number of the times to be drunk and stupid; or as Pops Racer would say: P.U.D. (pissed-up drunk).

I'm not sure how Pops felt about New Year's resolutions, though. I imagine it would be the same as what he thought about New Year's in general. And if that is so, then he would be proud of me for not bothering with New Year's resolutions. Because when has one ever been kept? For me, never. So I stopped making them about five years ago.

I think the best I ever did was to avoid mayonnaise until the middle of February. And if you knew me, you'd realize what an accomplishment that really was. However, I've now discovered that totally depriving yourself of something you enjoy is foolish. Do I use the same amount of mayo that I used to? No. I learned to make a sandwich taste just fine with a little bit. Let's just say, that when I die, the cause of death will not be 'too much' mayonnaise!

Let me say one more thing on the subject: It's OK to have a resolution to improve your life, but why do you have to wait until the beginning of a new year? It's just as easy to start at the beginning of a week, or the first of any month. Because when your current New Year's resolution fizzles out January 22, don't wait until January 1st of 2010 to make an improvement to your life, try again February 1st.

All of that being said, I'm going to make some resolutions, not for me, but for my fellow citizens and co-workers.

Why? Because I'm sick of the 'nanny-state' politics that are devouring our precious individual liberties in every corner of this great land. For example, even smaller cities and towns are turning to more and more government intrusion on personal freedom. In big cities it has already been lost: no smoking, no trans-fats, no driving with cell phones, no driving without seat belts, random 'checkpoints' by the police for drunk drivers and so on.

I'm actually able to listen to Chicago radio stations in my small Wisconsin city, while listening to the traffic report one of the highways had a back up of a couple of miles. No big deal, right? It is Chicago after all. Well, the back up of cars was created by a police checkpoint to-- wait for this-- make sure drivers had their seat belts on!

What the bigger cities of America have succumb to, is indeed frighting, however, more scary, it's coming to our smaller towns and cities. Brought to you mainly by leftist do-gooders who can't mind their own business. I know this because, I work with people like this, and people sit on our Common Council who want this tyranny.

Now, people in our city lost the freedom to smoke in restaurants three years ago. In 2008, the local people lost the freedom to smoke in bars and taverns.

Yes, bars and taverns! Aren't bars generally 'seedy' type places where certain people can go to fulfill some of their elementary vices, such as drinking, smoking, maybe a fling with someone you just met, among other things.

So let me get this straight, you're now able to go to a bar of your choice, drink alcohol and destroy your liver, eat a cholesterol filled pizza that clogs your arteries, take a girl home (that you just met) and possibly end up with several disease's, and gamble a sizable portion of your paycheck. BUT, GOD FORBID, you should leave the establishment with a trace of 'second-hand' smoke in your system. A choice you made before going in there. (For the record: this writer thinks the affects of 'second-hand' smoke are greatly exaggerated for political purposes. And even if I'm wrong about that, nobody puts a gun to your head to go into a bar).

So in 2009, if you have any power to make laws, or persuade lawmakers, make a New Years resolution to side with individual liberty before siding with the majority that wish to take it away.

TJ Madison is a pundit living in Fond du Lac, WI. He describes his views as a libertarian-Republican who is fighting creeping socialism on a daily basis.