Austrian Economics vs Keynesian Economics
What I like about this chart is that Keynesians are unlikely to feel mischaracterized. Which is good. Because the supernatural silliness of “animal spirits” is front and center.
I’d also note that Keynesians previously defined inflation the same way as Austrians and everyone else did (even Keynes himself defined inflationism as “debauch[ing] the currency” and “print[ing] notes.”) until they realized how politically inconvenient accuracy can be.
The State has said to society…I shall confiscate your power, and exercise it to suit myself.
[T]he interests of the State and the interests of society…are directly opposed…
The State…has invariably, as Madison said, turned every contingency into a resource for depleting social power and enhancing State power…
There are two methods…whereby man’s needs and desires can be satisfied. One is the production and exchange of wealth…the economic means. The other is the uncompensated appropriation of wealth produced by others…the political means.
The State…is the organization of the political means…[which] stands as primarily a distributor of economic advantage, an arbiter of exploitation…an irresponsible and all‑powerful agency standing always ready to be put into use for the service of one set of economic interests as against another.
The State is not…a social institution administered in an anti‑social way. It is an anti‑social institution…
State power has an unbroken record of inability to do anything efficiently, economically, disinterestedly or honestly; yet when the slightest dissatisfaction arises over any exercise of social power, the aid of the agent least qualified to give aid is immediately called for.
Under a regime of actual individualism, actually free competition, actual laissez‑faire–a regime which, as we have seen, cannot possibly coexist with the State–a serious or continuous misuse of social power would be virtually impracticable.
— Albert Jay Nock, Our Enemy The State 
You tell me if the revving-up of Uncle Sam’s welfare-state activities in the mid-1960s can be considered, by any scientific criterion, to have been clearly successful at reducing officially measured rates of poverty in the U.S.
From the article:
A knife attack put Darek Fidyka on his back for two years, but an amazing medical procedure appears to have partially mended his spinal cord.
The BBC reports that researchers and doctors in the UK and Poland figured out how to transplant cells from Fidyka’s nose to his spine, along with a bit of nervous tissue from his ankle. The olfactory ensheathing cells taken from the nose are key, because they’re the only cells in the nervous system that regenerate as we age through adulthood.
According to the Beeb, Fidyka has a long way to go, but he can now walk with some assistance outside the hospital.
Here’s how it works:
In the first of two operations, surgeons removed one of the patient’s olfactory bulbs and grew the cells in culture.
Two weeks later they transplanted the OECs into the spinal cord, which had been cut through in the knife attack apart from a thin strip of scar tissue on the right.
They had just a drop of material to work with - about 500,000 cells.
About 100 micro-injections of OECs were made above and below the injury.
Four thin strips of nerve tissue were taken from the patient’s ankle and placed across an 8mm (0.3in) gap on the left side of the cord.
The scientists believe the OECs provided a pathway to enable fibres above and below the injury to reconnect, using the nerve grafts to bridge the gap in the cord.
The scientists involved, whose work was funded by foundations, say they have no desire to profit from the breakthrough.
Read the full story at the BBC.
What keeps the market process in motion is competition - not competition in the sense of “perfect competition,” in which perfect knowledge is combined with very large numbers of buyers and sellers to generate a state of perennial equilibrium – but competition as the rivalrous activities of market participants trying to win profits by offering the market better opportunities than are currently available. The existence of rivalrous competition requires not large numbers of buyers and sellers but simply freedom of entry. Competition places pressure on market participants to discover where and how better opportunities, as yet unnoticed, might be offered to the market. The competitive market process occurs because equilibrium has not yet been attained. This process is thwarted whenever nonmarket barriers are imposed blocking entry to potential competitors.
— Israel Kirzner, Discovery and the Capitalist Process
Big Players [such as the Fed] and regime uncertainty create and increase the very sort of uncertainty that Keynes described. If we may call such policies ‘Keynesian’ then we may draw the inference that Keynesian policies tend to create and enhance the irregular ups and downs that Keynes attributed to modern capitalism as such. In this sense, Keynesian policies tend to create a Keynesian economy. Those post-Keynesians who argue for discretionary state intervention as a result of certain features of economic behaviour argue for policies that will increase – rather than reduce – the very behaviours they see as the problem.
— Roger Koppl, From Crisis to Confidence: Macroeconomics after the Crash
Los Angeles is catching flak for not being able to figure out how to maintain its own roads and sidewalks, despite its massive budget. Nevertheless, the city is looking at new ways to milk its citizens for even more money by trying to turn a host of minor crimes into ticketed administrative citations.
Los Angeles City Council is looking at the possibility of an “Administrative Citation Enforcement” pilot program. The city (aided by the Los Angeles Times) is presenting the program as a way to reduce the hassle for police to address low-level municipal violations. There’s so much paperwork involved and it is such a hassle when people don’t respond to warnings! It’s being pushed as a way to avoid having to arrest people for very minor crimes, which seems admirable at first glance:
It would allow city officials to impose financial penalties for such offenses as urinating in public, having dogs off leashes at the beach or dumping garbage in public streets.
Officials said the proposal, which was approved by the City Council’s budget committee Monday, is needed because warnings can be ignored and officers are often reluctant to take actions that can trigger a misdemeanor case.
Noise complaints at a child’s party are also cited as an example. “We don’t want to arrest Mommy and Daddy,” explained one City Council member. But note the examples here are all common community nuisances where actually most (nonlibertarian) folks wouldn’t object to citations. But the devil, as always, is in the details. The pilot program lists two-and-a-half pages of citable offenses, most of which have to do with pets and animals, and many of which the average resident might not be aware are even offenses. In addition to “failure to keep sidewalks clean,” the offenses include “tampering with refuse” (which will likely snag the many extremely poor folks who comb through recycling bins on trash day before the trucks come), “failure to post city business permit in a fixed location of business,” “café entertainment without a permit,” “amplified sound—refrigeration, air or heating,” “harboring unlicensed dog,” and most importantly “feeding pigeons in certain areas.” A police officer could probably hand out a half-dozen of these citations walking down the street where I live (especially in regards to pet licensing and stray animals). You can read the city’s details about the proposed program and the rest of the list here (pdf).
The citations will start at $100 but work all the way up to $1,000 for repeat violations. There is a two-step appeals process, but heads up: If you want to take it all the way, you have to submit the value of the fine as a deposit for the privilege and pay additional fees should you lose. And while the city has the burden of proof, it only has to reach the “preponderance of the evidence” threshold against the citizen, which is a much lower requirement than “beyond a reasonable doubt.”
The citations will be handled through an outside vendor who will get paid a flat fee per citation. The city expects that the new program will eventually generate $2.5 million in revenue per year. It will also create six new city employee positions.
Much like sticking police officers in schools prompted schools to start treating all forms of student behavior as criminal activity, making it a breeze for police to generate revenue for the city (and themselves) by citing people for a host of minor crimes is going to obviously result in police making citizens’ lives more miserable, especially for poor people who perhaps aren’t following every single pet law or business regulation because they can’t afford it.
Related: Earlier in the year, Brian Doherty noted how strict enforcement of jaywalking and misdemeanor laws and the implementation of various “small fines” like these are making life miserable for the poor.
==> In total, the government expects to collect $4.2 billion in one year from individuals because they don’t have health insurance.
==> 1 million people who earn less than twice the poverty level will be fined for not having health insurance in 2016.
==> This group of people–earning less than twice the poverty level–accounts for 25% of those who will be fined.
==> The government will extract $500 million in penalties from this group. These people are too poor to buy health insurance, remember.
==> Drilling down further, 200,000 people will be fined who earn less than the poverty level. These 200,000 people whom the government says are living below the poverty level will be forced to pay the IRS a total of $100 million in fines just for 2016. They also will not have health insurance, remember.
What is not shown in the above table–though the report itself explains–is that the total number of nonelderly uninsured Americans projected for calendar 2016 is some 30 million. This figure includes illegal immigrants and people who are exempt for various reasons from the mandate.
Isn’t it interesting that the “universal coverage” provided by the “Affordable Care Act” will still yield–according to the government’s own projections–almost 4 million Americans who will prefer to pay an average tax of more than $1,000 to the government for 2016, rather than buying health insurance that year?
[While] Attorney General Eric Holder [was] in Ferguson, Missouri, in response to the unrest after a local policeman shot 18-year-old Mike Brown, [he] assured the people of Missouri: “Our investigation into this matter will be full, it will be fair, and it will be independent.”
But Holder’s own record belies his lofty promise. As the U.S. Attorney for the District of Columbia from 1993 to 1997, Holder was in charge of policing the local police. When police violence spiraled out of control, he did little to protect Washington residents from rampaging lawmen.
The number of killings by Washington police doubled between 1988 and 1995, the year 16 civilians died due to police gunfire. Washington police shot and killed people at a higher rate than any other major city police department, as a Pulitzer Prize-winning Washington Post investigation revealed in late 1998. The Post reported that “Holder said he did not detect a pattern of problematic police shootings and could not recall the specifics of cases he personally reviewed.” Holder declared: “I can’t honestly say I saw anything that was excessive.”
There was such a dearth of oversight from Holder’s office that Washington police failed to count almost a third of the people killed by their officers between 1994 and 1997. Even when police review boards ruled that shootings were unjustified or found contradictions in officers’ testimony, police were not prosecuted. In one case, a police officer shot a suspect four times in the back when he was unarmed and lying on the ground. But Holder’s office never bothered interviewing the shooter.
Some of the most abusive cases involved police shooting into cars - a practice which is severely discouraged because of the high risk of collateral damage. Holder told the Post: “I do kind of remember more than a few in cars. I don’t know if that’s typical of what you find in police shootings outside Washington” Actually, “more than 50 officers over five years had shot at unarmed drivers in cars,” the Post noted, and Washington police were more than 20 times as likely to shoot at cars than were New York City police. Reports about some of the shootings were tainted by police perjury.
Shortly after Holder became U.S. attorney, a local judge slammed the Washington government for its “deliberate indifference” to police brutality complaints. In 1995, the Civilian Complaint Review Board, which purportedly investigated alleged police abuses, was shut down because it was overwhelmed by a backlog of accusations from aggrieved citizens. Despite the collapse of the system’s safeguards, Holder’s office remained asleep at the switch. Even assistant Washington police chief Terrance Gainer admitted: We shoot too often, and we shoot too much when we do shoot.”
Holder is now trumpeting the need for openness, but in the 1990s he acceded to pervasive secrecy on lawmen’s killings. The Post noted: “The extent and pattern of police shootings have been obscured from public view. Police officials investigate incidents in secret, producing reports that become public only when a judge intercedes.”
While Holder largely ignored killings by police, Holder lobbied the Washington City Council for mandatory prison sentences for anyone convicted of possessing a gun. He also lobbied the Washington City Council to impose mandatory minimum prison sentences for nonviolent drug offenders, including a prison sentence of up to 5 years for anyone possessing more than 1.5 ounces of marijuana. The PR bonanza from those initiatives helped Holder snare a promotion to Deputy Attorney General in 1997.
The Post series sparked an uproar which resulted in the Justice Department Civil Rights Division investigating Washington police shootings from the prior 5 years. And who did Attorney General Janet Reno put in charge of that effort? Eric Holder. His office denied that any conflict of interest existed, instead insisting that Holder’s “oversight of the review signifies the importance of this endeavor to the Department of Justice.” Local lawyer Michael Morgenstern, who had sued DC police in such cases, scoffed that Holder “had the opportunity to do this when he was there, and now all of a sudden, they’re sending him back to do the same job he didn’t do while he was there.”
As the smoke clears in Ferguson, Missouri, Americans have no reason to presume that either the local police or the feds have the market cornered on truth or justice. But Eric Holder’s record should raze any presumption that our attorney general deserves the benefit of the doubt on passing judgment on police shootings.
Holder is garbage.
Los Angeles Unified School District is ending its billion-dollar iPad program, which has drawn widespread criticism for distributing expensive devices to teachers who didn’t know what to do with them and students who kept losing or breaking them.
The costly program was considered a total failure, and it’s little surprise that district officials have finally relented and scaled back. More surprising, however, are revelations that District Superintendent John Deasy may have engaged in some crooked bargaining to arrange the deal in the first place.
According to The Los Angeles Times, Deasy’s previous connections to Apple and Pearson—the companies contracted to supply the iPads and instructional materials for them, respectively—amount to a conflict of interest. In hindsight, the bidding process that Apple and Pearson won to score the contracts seems biased in those companies’ favor,The LA Times notes:
Last week, a draft report of a district technology committee, obtained by The Times, was strongly critical of the bidding process.
Among the findings was that the initial rules for winning the contract appeared to be tailored to the products of the eventual winners — Apple and Pearson — rather than to demonstrated district needs. The report found that key changes to the bidding rules were made after most of the competition had been eliminated under the original specifications.
In addition, the report said that past comments or associations with vendors, including Deasy, created an appearance of conflict even if no ethics rules were violated.
Emails obtained by The LA Times show Jaime Aquino, Deasy’s deputy superintendent, advising Pearson officials on how to win the bid.
I should note that this isn’t the first time Pearson has been accused of something like this. Pearson, a British company, is the largest publisher of education materials in the world, and its efforts to lockdown contracts for Common Core-aligned testing material have drawn scrutiny.
Still, the iPad fiasco hasn’t dampened the district’s enthusiasm for forcing costly new technology on unprepared students and teachers. Select LA schools will be trying out other devices this fall (some of which are actually more expensive), and Deasy is fairly pleased with that:
"We will incorporate the lessons learned from the original procurement process," he said.
"We look forward to refining our processes and ultimately achieve our vision to equip every one of our students with a personal computing device to help them succeed in the 21st century."
I don’t run a bunch of schools, but this sounds like the exact opposite of learning our lesson to me.
Are you skeptical that the Common Core education standards will significantly improve school outcomes, given their massive cost and cumbersome standardized testing requirements? Why, you must be some kind of insane conspiracy theorist!
Michael Mulgrew, president of New York City’s United Federation of Teachers, remarked at a convention last month that only crazy people could possibly oppose Common Core. (His comments were not widely publicized until late last week.)
“I’ve heard the stories about how Eli Broad, Bill Gates, Joel Klein, and a flying saucer full of Martians designed these things to brainwash us all,” he said, according to The New York Daily News.
It’s a cheap shot, although it’s nothing compared to what he said next, regarding activists who are trying to presure legislatures to move away from Common Core:
"So I stand here in support for [Common Core] for one simple reason. If someone takes something from me, I’m going to grab it right back out of their cold, twisted, sick hand, and say it is mine. You don’t take what is mine. And I’m going to punch you in the face and push you in the dirt."
Really, this is petty tribalism at its most obvious. Mulgrew comes across as flatly disinterested in the actual policy; what he cares about is getting his goon squad fired up about one thing or another (note that the audience—presumably public school teachers—applauds his suggestion of violence). For union leadership, every issue is a fight, and any group that stands in opposition to the official union position is an enemy that needs to be beaten into submission.
Many teachers, and even some teachers unions, have actually joined conservatives and libertarians in opposition to Common Core. That’s because they recognize that centrally-mandated solutions to the national education problem are unlikely to work—even if such a diverse ideological coalition won’t agree on anything else.
But that’s beside the point. For some interest groups, if you’re not a friend, you’re enemy. Either you’re with Mulgrew, or he’s going to knock you in the dirt.
The Robber Barons and the Progressive Era | Tom Woods
Important advice on dealing with armed state bullies.