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Required Ruthlessness

“What I have argued in this book, and what the British experience convinces me even more to be true, is that the unforeseen but inevitable consequences of socialist planning create a state of affairs in which, if the policy is to be pursued, totalitarian forces will get the upper hand. I explicitly stress that “socialism can be put into practice only by methods of which most socialists disapprove” and even add that in this “the old socialist parties were inhibited by their democratic ideals” and that “they did not possess the ruthlessness required for the performance of their chosen task.”

Excerpt From: F. A. Hayek. “The Road to Serfdom.” University of Chicago Press, 2010-04-06. iBooks.
This material may be protected by copyright.

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Reading 2015 08 24

What Donald Trump Doesn’t Know about U.S. Trade

Trump fancies himself an ace negotiator, a skill that he has had some chance to hone in an embarrassing series of corporate bankruptcies, and he proposes to employ those skills to ensure trade that is “fair” by whatever ethical standards occur to this particular serial adulterer/crony capitalist/pathological liar/reality-television grotesque. While Trump himself is fundamentally unserious, the Right has witnessed a destructive reemergence of the old anti-trade populism articulated by Pat Buchanan and Ross Perot.

Read more at: http://www.nationalreview.com/us-trade-trump-gets-it-wrong

 

Economic liberty, free speech spook the American left

When Bernie Sanders, President Obama, or the New York Times editorial page advocate big government, it’s usually on the premise that big government is needed to protect the powerless. But look carefully, and the pattern becomes clearer. When big government oppresses the powerless, the Left is equally likely to defend big government.

John Cochrane on Too Much Debt

I had hoped the world learned this lesson in the financial crisis. Equity is great. When things go bad, shareholders lose value by prices falling, but they cannot run and the firm cannot fail if it does not pay equity holders.

Financial crises are always and everywhere about debt, especially short term debt. Lending more, encouraging more bank leverage, reducing reserves and margin requirements, means that when the downturn comes a needless wave of runs and defaults follows.

Inevitably, it seems, another downturn will come, another set of books will have been found to have been cooked, and then we will find out who lent too much money to whom. US investment banks, 2008, strike one. Greece, 2010, strike 2. China, 2015, strike 3? Do we no longer bother closing the barn doors even after the horse leaves?

This story should also give one pause about the wisdom of “macro-prudential” policy, by which wise central bankers are supposed to presciently open and close the spigots of leverage to manage asset prices.

Trump’s Worst Argument

Campaign money also increases political competition. Without donations, politicians who aren’t wealthy or well known would never be able to wage a competitive campaign for the White House. A major reason this year’s Republican field is so wide and deep is because candidates have access to more donations via super PACs. Americans should want a system in which middle-class candidates like Marco Rubio or Scott Walker have a chance to be President.

But it’s naive to examine his career and conclude that he lives only to serve others. It’s not clear to us why the agenda of one rich guy in Manhattan is superior to one that incorporates the views of a thousand rich guys across the U.S.

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Oh Shit, Another New Order

hitler-nazi-rally

from Jeffery Tucker at Beautiful Anarchy, Why We Should Talk About Fascism:

But just as with socialism, fascism is also a method for propagandizing people into considering a new way of ordering society. The fascist must get elected. He must convince people to acquiesce to his dictatorial aspirations. Here is where the failures of the current system serve him well. The entire establishment is deeply corrupt, incredibly stupid, not serving the nation, failing to boost the national spirit — and so on. The orator seeks to tap into raw emotion in hopes of inspiring a suspension of incredulity.

Fascism, then, would not propose the abolition of private property, or even the over nationalization of industry. It would not propose to suppress religion or family. It proposes regulatory controls on all of these sectors of life in order to channel them into a single national interest. This requires a massive and totalitarian state, one that effectively obliterates any room for individual decision making, institutional autonomy, freedom of action, entrepreneurship, and so on.

 

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A Legacy of Sand

obamacontempt

from Phil Gram in The Wall Street Journal,How Obama Transformed America

Excerpts:

Americans have always found progressivism appealing in the abstract, but they have revolted when they saw the details. President Clinton’s very progressive agenda—to nationalize health care and use private pensions to promote social goals—was hardly controversial during the 1992 election. But once the debate turned to the details, Americans quickly understood that his health-care plan would take away their freedom. Even Mr. Clinton’s most reliable allies, the labor unions, rebelled when they understood that under his pension plan their pensions would serve “social goals” instead of maximizing their retirement benefits.

In its major legislative successes, the Obama administration routinely proposed not program details but simply the structure that would be used to determine program details in the future. Unlike the Clinton administration’s ill-fated HillaryCare, which contained a detailed plan to control costs through Regional Healthcare Purchasing Cooperatives and strictly enforced penalties, ObamaCare established an independent payment advisory board to deal with rising costs. The 2009 stimulus package was unencumbered by a projects list like the one provided by the Clinton administration, which doomed the 1993 Clinton stimulus with ice-skating warming huts in Connecticut and alpine slides in Puerto Rico.

Voters used the first off-year election of the Obama presidency to express the same disapproval that they had expressed in the Clinton presidency. Democrats lost 54 House and eight Senate seats in 1994, and 63 House and six Senate seats in 2010.

Mr. Clinton reacted to the congressional defeat by “triangulating” to ultimately support a bipartisan budget and tax compromise that fostered broad-based prosperity and earned for him the distinction of being one of the most successful modern presidents. Mr. Obama never wavered. When the recovery continued to disappoint for six long years he never changed course. Mr. Clinton sacrificed his political agenda for the good of the country. Mr. Obama sacrificed the good of the country for his political agenda.

Most important, the American people, who came to embrace the Roosevelt and Reagan transformations, have yet to buy into the Obama transformation. For all of these reasons it appears that the Obama legacy rests on a foundation of sand.

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Reading 2015 08 21

Who Will Get The Dreary Economy Going

Put Fannie and Freddie Out of Taxpayer’s Misery

Debt is Good